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Gold extends weakness after worst month in 2 years

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Reuters MANILA
Last Updated : Aug 03 2015 | 8:28 AM IST

MANILA (Reuters) - Gold edged lower early on Monday, trading near a 5-1/2-year low, as expectations for a near-term hike in U.S. interest rates kept up the downward pressure after bullion fell the most since 2013 in July.

FUNDAMENTALS

Spot gold was down 0.2 percent at $1,092.80 an ounce by 0019 GMT. The metal fell as low as $1,079.50 on Friday before recovering at the close. That was near last month's trough of $1,077, its weakest since February 2010.

Bullion lost almost 7 percent in July, its deepest monthly fall since June 2013.

U.S. gold for December delivery slipped 0.2 percent to $1,092.50 an ounce.

Hedge funds and money managers maintained their first bearish stance in COMEX gold on record during the week ended July 28, suggesting the recent mass exodus from bullion was more than a knee jerk reaction.

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Billionaire hedge fund manager John Paulson, one of the world's most influential gold investors, said the metal is now at an appropriate price level, following last month's rout.

American Eagle gold coin sales surged to the highest in more than two years, U.S. Mint data showed, as tumbling prices spurred a buying spree in the United States.

In Asia, gold demand hardly perked up last week with many would-be buyers predicting further price declines, keeping premiums steady in the world's top gold consuming region.

Members of South Africa's Association of Mineworkers and Construction Union on Sunday rejected a wage offer from gold producers of increases of up to 17 percent, spokesman Manzini Zungu said.

(Reporting by Manolo Serapio Jr.; Editing by Ed Davies)

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First Published: Aug 03 2015 | 8:20 AM IST

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