Investing.com - Gold prices extended sharp losses from the previous week on Monday, as growing expectations that the Federal Reserve could raise interest rates sooner than expected dampened demand for the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery fell to a session low of $1,322.70 a troy ounce, before trimming losses to last trade at $1,323.00 an ounce during European morning hours, down 0.97%, or $12.90.
Gold rose 0.4%, or $5.30, on Friday to settle at $1,336.00 an ounce. Futures were likely to find support at $1,319.10 a troy ounce, the low from February 24 and resistance at $1,343.20, the high from March 21.
Meanwhile, silver for May delivery dropped 0.75%, or 15.2 cents, to trade at $20.15 a troy ounce, the lowest since February 28. Silver ended Friday’s session down 0.59%, or 12.0 cents, to settle at $20.31 an ounce.
Comex gold prices lost 3.1%, or $43.00, last week, the worst weekly drop since November, amid expectations that the Fed could hike interest rates earlier than previously thought.
Fed Chair Janet Yellen indicated last week that the central bank could begin to raise interest rates about six months after its bond-buying program winds up, which is expected to happen this fall.
The comments prompted investors to bring forward expectations for a rate hike to as soon as March of next year.
The central bank said that it would reduce its monthly stimulus program by an additional $10 billion to a total of $55 billion a month, in a widely anticipated decision.
The Fed also updated its forward guidance, discarding the 6.5% unemployment threshold for considering when to increase borrowing costs and said it will look at a wide range of information.
Elsewhere on the Comex, copper futures for May delivery inched up 0.19%, or 0.6 cents, to trade at $2.956 a pound, as weaker than expected Chinese manufacturing data fuelled hopes Beijing will unveil fresh stimulus measures to boost growth.
Data released earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to an eight-month low of 48.1 in March from a final reading of 48.5 in February.
The industrial metal fell to $2.877 a pound on March 19, the lowest since July 2010, amid growing concerns over the health of China’s economy.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.