Gold under pressure

Reuters

Singapore

Gold was little changed on Monday, ahead of a Federal Reserve policy meeting this week when the US central bank is expected to raise interest rates for the first time in nearly a decade.

In its last policy meeting of the year on Dec. 15-16, the Fed is seen raising rates by a quarter of a percentage point. Investors fear higher rates could dent demand for non-interest-paying bullion, while boosting the dollar.

Gold has already slid 9 percent for the year, its third straight annual decline, in anticipation of a rate hike.

Spot gold eased 0.1 percent to $1,073 an ounce by 0651 GMT, after gaining 0.3 percent on Friday. "With the Fed decision only two days away, price fluctuations will be limited as a rate hike is already priced in," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

Gold prices could go up immediately following the rate hike announcement due to the recent sharp declines, but they will eventually drift lower to $1,000, he said.