Gold extended losses on Monday, falling towards a near six-year low reached last week, pressured by a robust dollar and upbeat comments from Federal Reserve officials on a possible US rate hike next month. Spot gold had dropped 0.7 percent to $1,070.01 an ounce by 0644 GMT, down for a 13th session in the 16 trading days this month. The metal declined to $1,064.95 last week, the lowest since February 2010.
Speculation that the Fed will lift interest rates for the first time in nearly a decade this year has intensified since the release of strong US jobs data earlier this month. Comments from Fed officials have boosted that view. Higher rates tend to weigh on gold, as they lift the opportunity cost of holding non-yielding assets, while boosting the dollar. "We perceive gold price at around $1,080 somewhat like a technical play, a reflection of market behaviour of 'sitting on the fence' as they await the FOMC meeting in December," said OCBC Bank analyst Barnabas Gan, referring to the Federal Open Market Committee.
"We keep our year-end forecast of $1,050," Gan said. More pressure on bullion is expected as investors exit positions in the metal ahead of the looming US rate hike. Assets in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, slid 0.18 percent to 660.75 tonnes on Friday, the lowest since September 2008.