Gold, silver futures settle lower

Traders will also be keeping an eye on USA data, including non-farm payrolls due on Friday.

Spot gold fell 1.5 percent to a session low of 1127.70 an ounce its biggest fall in 3 weeks and was trading down 1.3 percent at 1131.42 by 1353 GMT.

The Fed will probably increase interest rates later this year and tighten policy gradually thereafter, New York Fed President William C. Dudley said Monday, echoing the sentiment of Chair Janet Yellen that an uncertain global outlook won’t postpone liftoff into 2016.

What is more, it was announced yesterday that seven banks in Switzerland are being investigated for possible collusion in the precious metals markets.

“With a few major data coming in this week, we could see a few volatility in prices”.

Gold shed a few losses after a report released on Monday by the Bureau of Economic Analysis showed that inflation readings came in as expected, at no change from July for the personal consumption expenditures (PCE) price index, with the Core PCE price index ticking 1 tenth higher to 1.3 percent year on year which is still well below the Fed’s 2 percent target.

The metal has been hit by last week’s revelations that Volkswagen AG’s falsified USA vehicle emission tests, which a few believe could affect demand for diesel cars. Data on Friday supported the view that the Fed could begin raising rates over the next months. U.S. gross domestic product rose at a 3.9 per cent annual pace in the second quarter, up from 3.7 per cent reported last month.

“Interest around $1,141 should continue to support gold over the short-term, while $1,155 will provide resistance”, MKS Group said in a note.

Holdings in SPDR Gold Trust, the world’s top gold-backed exchange-traded fund, rose for a fourth straight session on Friday.

The net-long position more than tripled to 21,525 contracts in gold futures and options in the week ended September 22, according to U.S. Commodity Futures Trading Commission data released three days later.

Silver was down 0.1% at $14.52/oz, while palladium was down 0.4% at $641.25/oz.

But there is a glimmer of hope for the metal with the prospect of tighter emissions legislation.

Upcoming European legislation on Carbon dioxide emissions will make it harder for the authorities to back a war on diesel, analysts have said.

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