Investment.com - Gold fell in Asia on Monday with markets in the U.S. and U.K. shut for holidays and investors focused on a possible Fed interest rate hike as early as next month.
Japan reported retail sales for April fell 0.8%, less than the 1.2% decline expected year-on-year. U.S. markets will be closed for the Memorial Day holiday.
Gold for August delivery on the Comex division of the New York Mercantile Exchange eased 0.97% to $1,204.85 a troy ounce.
Silver futures for July delivery fell 1.90% to $15.970 a troy ounce. Also on the Comex, copper futures for July delivery eased 0.47% to $2.101 a pound.
Copper traders will be looking out for a pair of reports on China's manufacturing sector due on Tuesday, amid ongoing concerns over the health of the world's second biggest economy. The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for May to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
There is also ISM manufacturing data on Wednesday and ISM services on Friday as traders search for more clues on the timing of the next U.S. rate hike.
Market players will also be focusing on the outcome of Thursday’s European Central Bank meeting as well as new quarterly forecasts that will signal whether the bank is getting closer to its inflation target.
Last week, gold prices sank to a more than three-month low on Friday, as the dollar spiked after Federal Reserve Chair Janet Yellen said a rate hike was probably appropriate in coming months.
In remarks made during an appearance at Harvard University Friday afternoon, Yellen said a rate increase in the coming months "would be appropriate," if the economy and labor market continue to improve.
Traders are now pricing in a 28% chance for a rate hike in June and 60% in July, according to CME Group's (NASDAQ:NASDAQ:CME) FedWatch tool. September odds were at about 68%.
Yellen’s comments lifted the U.S. dollar to its highest level in two months against a basket of major currencies on Friday, logging its fourth consecutive week of gains, on hints the Fed is getting closer to raising interest rates.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.