Investing.com - Gold futures dropped to one-week lows on Monday, reversing all of the previous week’s gains, as investors looked ahead to the outcome of the upcoming Federal Reserve meeting later in the week.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.82% to $1,212.50, the lowest since December 9 from $1.222.60 late Friday.
Investors remained wary ahead of Wednesday’s Fed meeting, as ongoing speculation over the prospects for a U.S. rate hike next year fuelled expectations that the U.S. central bank could adjust its forward guidance.
The precious metal rose almost 3% last week as steep losses in oil and equity markets fuelled increased demand for safe haven assets, amid lingering fears of a global economic slowdown.
Market sentiment was hit by concerns over the economic impact of the continuing rout in oil prices and its effect on energy companies. Data late last week showing further signs of a slowdown in China added to fears over the global economic outlook.
Worries over the stagnating euro zone economy and prospects for a political crisis in Greece also fuelled widespread risk aversion, after a surprise decision by the government to bring forward a parliamentary vote for president to this week.
The move raised the prospect of snap elections if Prime Minister Antonis Samaras’ candidate is not approved by parliament, which could see the anti-bailout Syriza party take power.
Elsewhere in metals trading, silver for March delivery was down 1.08% at $16.87 a troy ounce, while copper futures for March delivery edged up 0.16% to $2.93 a pound.