Gold fell more than 2 percent on Monday, after posting its biggest weekly gain in two months, as the dollar firmed before a Federal Reserve meeting that could provide clues on the timing of a possible interest rate rise by the U.S. central bank.
The Fed’s meeting on Tuesday and Wednesday follows data pointing to a strengthening economy, which could sharpen the case for the central bank to take a more hawkish stance. A sooner-than-expected rise in interest rates could boost the dollar and hurt non-interest-bearing bullion.
Spot gold fell to a session low of $1,191 an ounce earlier and was down 2.4 percent at $1,993 an ounce. The metal climbed 2.6 percent last week, its largest such increase since October but investors were cashing in recent gains after gold failed to breach key resistance convincingly at $1,235.