AMSTERDAM/LONDON: Gold prices slipped as much as 1.7% on Monday, weighed down by fears that the US Federal Reserve may provide a path for tapering its expansive monetary policy at its two-day meeting this week.

Spot gold fell 0.7% to $1,864.36 per ounce by 10:18 a.m. EDT (1418 GMT) after hitting its lowest since May 17 at $1,848.49. US gold futures dropped 0.6% to $1,868.00.

Phillip Streible, chief market strategist at Blue Line Futures in Chicago, said there could have been some liquidation in gold ahead of the Fed’s policy meeting, which begins on Tuesday.

“There’s the possibility that the Fed may indicate that they’re going to start tapering, which should weigh in on gold,” Streible said.

Market participants will also closely scrutinise the Federal Reserve’s evolving outlook on unemployment, inflation and economic growth, as well as the likely date of a first rate hike.

“We see risks for further weakness in prices as (Fed) taper talk saps interest in the yellow metal at a time when flows are not particularly supportive,” TD Securities analysts said in a note.

Speculators reduced their net long positions in COMEX gold in the week ended June 8 and raised their net long positions in silver.

Gold’s heavy losses also came in the face of a slight pull-back in the dollar, which recorded its largest weekly rise in five weeks last week.

Elsewhere, silver fell 0.1% to $27.86 per ounce.

“Silver price has not proved to be as strong as gold which is unusual because it normally outperforms gold in a market when inflation is a concern, though it may play catch-up later on,” Heraeus said in a note.

Palladium dropped 0.2% to $2,769.93, while platinum rose 1.7% to $1,169.00.