Gold dropped to fresh eight-month lows on Monday on fears that the U.S. Federal Reserve may signal an early interest rate hike at this week’s policy meeting, while the strength in the dollar and weak physical demand also weighed on bullion.
Spot gold fell to $1,225.30 an ounce, its lowest since January, early on Monday before steadying at $1,227.70 by 0020 GMT. Last week, the metal dropped 3 percent as the dollar index posted its ninth straight weekly gain.
The Fed is facing perhaps its most pivotal meeting of the year this week, as it debates a potential overhaul of its guidance on interest rates and seeks to nail down a plan for exiting its extraordinarily easy monetary policy.
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