Gold edged down slightly on Monday, after rising over one per cent to a near 3-week high in the previous session, as equities rose and the dollar recovered from lows hit after disappointing US growth figures last week.

Spot gold fell 0.3 per cent to $1,346.89 an ounce at 0056 GMT. Bullion hit a high of $1,355.10 on Friday, its highest level since July 12. US gold was down 0.3 per cent at $1,354 an ounce.

The US Commerce Department had reported on Friday that the US economy grew at a 1.2 per cent annual rate in the second quarter, much less than expected, as inventory investment fell for the first time in nearly five years.

Asian shares ticked up slightly on Monday, while the dollar index, which tracks the greenback against a basket of six rival currencies, was up 0.1 perc ent at 95.654, crawling away from its Friday low of 95.384, its lowest since July 5.

The Federal Reserve should not overreact to Friday's weaker-than-expected US GDP report, but needs to consider more data before contemplating another interest rate increase, Dallas Fed President Robert Kaplan said.

The Federal Reserve could raise interest rates up to two times before year-end, San Francisco Fed President John Williams had said on Friday as he downplayed data that showed the US economy grew far less than expected in the last quarter.

Hedge funds and money managers increased their net long position in COMEX silver contracts for the seventh straight week, but cut net long position in gold futures and options, in the week to July 26, US Commodity Futures Trading Commission data had showed on Friday.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.40 per cent to 958.10 tonnes on Friday.

Related Topics
comment COMMENT NOW