Investing.com – Gold prices traded close to six-week lows, despite downbeat economic data signalling a slowdown in manufacturing activity, as investors turned attention to monetary policy, with speeches from several Federal Reserve officials slated for later in the week.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $10.06, or 0.81%, to $1,246.22 a troy ounce.
Gold failed to capitalize on the release of weaker than expected data as new orders for key U.S.-made capital goods unexpectedly fell in May suggesting a slowdown in the manufacturing sector, increasing investor fears that second-quarter economic growth may not be as robust as previously expected.
The Commerce Department said on Monday that overall orders for durable goods, fell 1.1% in May, the biggest decline since November.
Analysts had forecast durable goods orders to decline -0.6%.
The precious metal has held firm in recent sessions but is expected to come under pressure later this week, as several Fed officials are expected to make a public address.
After raising rates for the second time this year in June, the Federal Reserve indicated that three total rate hikes remained appropriate.
Some analysts, however, continued to questioned whether the Fed would tighten monetary policy again before the year-end.
"The US central bank said they will keep tightening their monetary policy, but traders are not yet convinced that they will be as hawkish as they are letting on." David Madden, market analyst at CMC Markets UK said.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
In other precious metal trading, silver futures fell 0.54% to $16.557, a troy ounce while platinum futures fell by 1.32% to $919.25.
Copper traded flat at $2.638, while natural gas, gained 3.02% to $3.040.