Manila: Gold languished near its weakest level since early 2010 on Tuesday, with no meaningful recovery seen as expectations for a US interest rate increase grow.
The Federal Reserve begins a two-day meeting later in the day where policymakers are likely to signal further that a rate hike later in the year is certain as the U.S. economy strengthens.
Spot gold was flat at $1,093.45 an ounce by 0051 GMT. Bullion fell to as low as $1,077 on Friday, its cheapest since February 2010, stretching its losing run to a fifth straight week.
US gold for August delivery slipped 0.3 percent to $1,093 an ounce.
Amid weaker gold prices, holdings of the world`s biggest gold-backed exchange-traded fund, the SPDR Gold Trust , fell for a seventh day on Friday to 21.87 million ounces, the lowest since September 2008.
Also weighing on sentiment, China`s net gold imports from main conduit Hong Kong fell to a 10-month low in June, reflecting weak demand from the major consuming nation.
Money managers, who have been cooling on gold for some time, last week held more short positions than long ones in the precious metal for the first time in nearly a decade, Bank of America said, suggesting an expectation prices will continue to fall.
Speculators have confirmed what everyone else has been thinking: expect more falls in commodities, as worries about China and higher interest rates combine with waning sentiment to suggest markets are heading further south.
Reuters
First Published: Tuesday, July 28, 2015, 08:27