Investing.com - Gold futures traded at a nine-month low on Monday, as growing expectations for higher U.S. interest rates dampened sentiment for the precious metal.
On the Comex division of the New York Mercantile Exchange, gold for December delivery hit a daily low of $1,208.90 a troy ounce, a level not seen since January 2.
Prices recovered to last trade at $1,214.50 during U.S. morning hours, down $2.10, or 0.17%.
Futures were likely to find support at $1,204.30, the low from January 2 and resistance at $1,229.20, the high from September 19.
Also on the Comex, silver for December delivery shed 14.7 cents, or 0.82%, to trade at $17.69 a troy ounce. Prices slumped to a session low of $17.33 earlier, the weakest level since July 2010.
Gold remained lower despite data showing that U.S. existing home sales fell unexpectedly in August.
The National Association of Realtors said that existing home sales declined 1.8% to a seasonally adjusted 5.05 million units last month from 5.14 million in July.
Analysts had expected existing home sales to rise 1% to 5.20 million units in August.
The Federal Reserve cut its monthly bond-buying program by $10 billion following its two-day policy meeting on September 17, keeping the program on track to finish next month.
While the Fed reiterated that it expects rates to remain on hold for a "considerable time" after its quantitative easing program ends, it also projected a faster pace of rate hikes.
For the end of 2015, the median forecast was 1.375% compared to a June forecast of 1.125%.
Gold and silver cost money to store and struggles to compete yield-bearing assets when interest rates are on the rise.
The dollar traded near the highest level in more than six years against the yen, while the euro hovered close to 14-month lows, as markets interpreted the Fed's statement as hawkish.
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.
Elsewhere in metals trading, copper for December delivery lost 5.1 cents, or 1.66%, to trade at a four-month low of $3.040 a pound.
Copper traders looked ahead to key Chinese economic data later this week to gauge the strength of the world’s second largest economy.
The next slice of Chinese economic data to come out will be the HSBC preliminary purchasing managers' index for September, due on Tuesday. The report is expected to show that factory activity deteriorated to a 4-month low of 50.0 this month from August’s reading of 50.2.
China’s Finance Minister Lou Jiwei reiterated that policymakers in Beijing will not make major policy adjustments in response to individual economic indicators.
The comments were made at a meeting of finance ministers and central bank governors from the G20 countries in Australia over the weekend, according to a statement from the People's Bank of China.
Lou’s comment dampened speculation that China will increase stimulus to meet this year’s growth target of 7.5%.
The Asian nation is the world's largest copper consumer, accounting for nearly 40% of global demand.