Gold Below $1320 as Speculation Shifts to U.S. Rates

Gold fell on Monday as the dollar firmed on speculation over an earlier-than-expected hike in U.S. interest rates following strong job data, which dented investment demand for the metal.

Gold has been under pressure since data on Thursday showed U.S. employment growth jumped in June and that the jobless rate closed in on a six-year low, evidence of brisk economic growth. The data led investors to bring forward their views on timing of the first rate hike by the U.S. Federal Reserve to the middle of 2015, although most economists said that more data was needed.

An interest rate hike would encourage investors to withdraw money from non-interest-bearing assets such as gold.  Spot gold slipped 0.4 percent to $1,315 an ounce, while U.S. gold futures for August delivery settled down $3.60 percent at $1,317 an ounce.


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