Investing.com - Gold prices fell back towards one-year lows on Monday, as traders turned their attention towards the latest U.S. growth figures to be released at the end of the week.
At 11:28 AM ET (15:28 GMT), gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell $7.00, or 0.6%, to $1,224.10 a troy ounce.
That was not far off last week’s low of $1,211.70 which was its weakest level since July 11, 2017.
Gold prices managed to pull off last week’s one-year low after U.S. President Donald Trump launched an attack on the Federal Reserve late Thursday, claiming that their plans to raise U.S. interest rates risked undermining his efforts at strengthening the economy.
Trump ratcheted up his criticism of the Fed on Friday, taking to Twitter to claim that tighter monetary policy was penalizing the U.S. by contributing to a stronger dollar.
However, the recovery in the yellow metal was short-lived with investors looking ahead to Friday’s U.S. GDP report to see how the economy performed in the second quarter. The data is expected to show that growth rebounded in the three months to June, boosted by an increase in consumer spending.
Consensus is looking for strong growth of 4.1%, more than doubling the expansion seen in the first three months of the year. But the Federal Reserve Bank of Atlanta is currently predicting a stronger rise of 4.5%, while a Bloomberg survey of economists saw some predictions rising as high as 5.4%.
Analysts at Barclays pointed to last week’s strong data and boosted their own Q2 GDP tracking estimate by a cumulative three-tenths, to 5.3%.
A stronger-than-expected reading would support the Fed’s plans to continue with gradual rate hikes.
Fed fund futures currently price in a quarter-point hike for September, with the probability for a second increase in December at 65%, according to Investing.com’s Fed Rate Monitor Tool.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
In other metals trading, silver futures lost 1.02% at $15.390 a troy ounce by 11:30 AM ET (15:30 GMT).
Palladium futures advanced 1.41% to $901.40 an ounce, while sister metal platinum slipped 0.02% at $8829.30.
In base metals, copper traded down 0.4% to $2.745 a pound.