US MIDDAY: gold slides

Gold fell 1 percent on Monday, touching a 2-1/2-week low, as the dollar strengthened and US Treasury yields rose ahead of a two-day Federal Reserve meeting, while a world stock market index surged to a record and Wall Street also hit new highs.
Easing tensions on the Korean peninsula also reduced gold's safe-haven bid. On Sept. 8, gold's session high of $1,357.54 an ounce was the highest in 13 months. On Friday, US data showed hedge funds and other speculators had raised net long positions in the precious metal for nine straight weeks. "There was a lot of speculative froth in the gold market which seems to have receded now," Commerzbank analyst Carsten Fritsch said in a telephone interview. "Expectations that the Fed will raise US interest rates argue for a correction here." Spot gold was down 1.04 pct at $1,305.46/oz by 2:05 p.m. EDT (18:05 GMT). The most active US gold futures for December delivery settled down $14.40, or 1.09 percent, at $1,310.8 per ounce. Spot silver was down 2.63 pct at $17.117/oz, while platinum fell 0.99 pct to $954.5/oz. Palladium was up 1.42 pct at $936.1/oz.
The dollar hit an eight-week high against the yen, as investors increased bets the Fed could raise interest rates in December. Fed policy makers meet Tuesday and Wednesday. Investors expect the Fed will announce plans to start trimming its balance sheet, which should support the dollar and weigh on dollar-priced gold. "Gold doesn't do well in a high rate environment," INTL FCStone analyst Edward Meir said in a telephone interview, noting that central banks have been tightening or moving toward tightening in Canada, England, Europe and the United States. Gold's slide on Monday did not bring it as low as $1,300 an ounce. Meir said gold's support level on the charts was around $1,280 an oz while the $1,300 level "is more psychological."
Investors grew less worried about tensions on the Korean peninsula. Chinese President Xi Jinping and US President Donald Trump spoke about pressuring North Korea with economic sanctions imposed through the United Nations, the White House said. Trump addresses world leaders at the United Nations on Tuesday. Kinross Gold Corp gave the go-ahead to spend more than $1 billion to expand two of its gold mines, including its Tasiast mine in West Africa.