Gold rebounded from a near five-week low as the dollar dropped on Monday, shrugging off earlier pressure by top Federal Reserve officials' comments fuelling speculation that US interest rates would rise sooner rather than later. Speaking at a meeting of leading central bankers in Jackson Hole, Wyoming, Fed Chair Janet Yellen said on Friday that an improvement in the economy had boosted the case for another rate rise, while Vice Chair Stanley Fischer said the US central bank was still on track to lift rates this year.
The CME Group's FedWatch tool showed the market pricing in more than a 30 percent chance of a hike in September, up from 18 percent before Yellen and her deputy Fischer spoke.
Spot gold touched its lowest since July 26 at $1,314.70, and was up 0.3 percent at $1,324.41 an ounce by 2:49 pm EDT (1849 GMT), after falling for the past six sessions straight. US gold futures for December delivery settled up 0.09 percent at $1,327.10.
"Precious metals prices still remain under pressure from the incumbent rate hike but a weaker US dollar is giving them a new sign of life for the time being," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York. Hedge funds and money managers increased their net long position in COMEX gold contracts in the week to August 23, US Commodity Futures Trading Commission data showed on Friday. Silver was rose 1.2 percent at $18.84 an ounce, having earlier touched its lowest in more than eight weeks at $18.36 an ounce. Platinum, the biggest faller among the major precious metals last week, was up 1.1 percent at $1,079.20, while palladium was up 1.5 percent at $695.60.
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