Investing.com - Gold fell further in Asia on Monday and silver dropped sharply as investors noted comments by Federal Reserve Vice Chair Stanley Fischer that appeared to raise prospects for a near-term rate hike by the Federal Reserve.
Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.68% to $1,337.06 a troy ounce.
Also on the Comex, silver futures for September delivery dropped 2.33% to $18.867 a troy ounce, while copper futures for September delivery were quoted down 0.46% to $2.161 a pound.
The Fischer comments come ahead of a highly anticipated speech by Fed Chair Janet Yellen at the annual meeting of top central bankers and economists in Jackson Hole, Wyoming, seen as offering fresh clues on the timing of the next U.S. rate hike.
Last week, gold prices ended Friday's session deep in negative territory, as investors digested a fresh batch of comments from key Federal Reserve policymakers on the possibility of a near-term interest rate hike by the U.S. central bank.
Odds for a near-term rate hike came back in focus after San Francisco Fed President John Williams signaled support for a September rate increase in a Thursday afternoon speech.
"In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later," he said.
Williams's speech was just the latest piece of hawkish rhetoric from top Fed officials. Earlier this week, New York and Atlanta Fed presidents William Dudley and Dennis Lockhart both said a September rate hike may be on the table.
According to Investing.com's Fed Rate Monitor Tool, investors are pricing in a 12% chance of a rate hike by September. December odds were at around 46%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
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.