Gold fell to a six-week low on Tuesday after Federal Reserve officials sounded a hawkish note on interest rates, boosting the dollar, while attention turned to US payrolls data this week for further clues on the pace of rate hikes. Fed Chair Janet Yellen said on Friday the case for higher rates was strengthening, though she gave little clarity on the timing of a move. In an interview on Tuesday, Vice Chair Stanley Fischer said the US job market is nearly at full strength and that the pace of rate increases by the Fed will depend on how well the economy is doing.
US consumer confidence rose to an 11-month high in August, pressuring US stocks lower due to concerns about a rate hike this year, while the dollar rose 0.5 percent. Spot gold was down 0.8 percent at $1,312.71 an ounce by 2:49 pm EDT (1849 GMT), after falling as low as $1,311.65, the lowest since July 21. US gold futures for December delivery settled down 0.8 percent at $1,316.5 per ounce.
"It looks as though we're going to see another pretty solid month of jobs gains, and that should mean that there's a return (of expectations for) a September rise - there's still an outside chance of that, according to fed funds futures - or more realistically, a December rate rise," Mitsubishi analyst Jonathan Butler said. Silver was down 1.3 percent at $18.59 an ounce, having hit a two-month low of $18.36 in the previous session. Platinum was down 2.1 percent at $1,050.99, the lowest since July 5, while palladium was down 3.2 percent at $673.72, the lowest since July 25.