Gold heading for fourth monthly drop as bears take command

Gold is heading for a fourth monthly decline, the longest streak since 2013, as investors favor the dollar and pessimism on the metal grows.
Bullion for immediate delivery was down 0.2% at $1,219.25 an ounce at 10:16 a.m. in London. Prices are down 2.7% this month and near a one-year low.
The precious metal has fallen out of favor after Federal Reserve policy makers boosted interest rates twice this year. The Fed is expected to affirm plans for two more hikes at a meeting this week.
With holdings in exchange-traded funds shrinking, funds have been building up their bets on further declines in prices. As of last week, money managers held the biggest net-short position in futures and options in records going back to 2006, according to CFTC data compiled by Bloomberg.
“Gold is continuing its bearish movement and is laying the foundation for another negative week,” said Carlo Alberto De Casa, chief analyst at ActivTrades in London. “Despite the recovery of the euro against the U.S. dollar, little seems to have changed and investors still prefer other assets over bullion.”
Earlier Tuesday, the Bank of Japan left its key interest rates unchanged and traders’ attention is now switching to monetary policy decisions from the Federal Reserve and Bank of England later this week.
“Gold has been on a downward path since the last few weeks owing to a firmer U.S. dollar, ETF outflows and weaker consumer demand,” said Madhavi Mehta, an analyst at Kotak Commodity Services Pvt in Mumbai. — Bloomberg