Gold hits two-week low, silver lowest in 7 weeks * Speculators cut bullish bets on gold, silver * GRAPHIC-2016 asset returns: reut.rs/1WAiOSC (Updates throughout, adds LONDON dateline) By Jan Harvey LONDON, Aug 22 (Reuters) – Gold fell to a two-week low on Monday as upbeat comments from Federal Reserve officials on the USA economy boosted expectations that the central bank could lift interest rates sooner rather than later. Central bankers from around the world will gather from August 25 for an annual meeting in the mountains of Jackson Hole, Wyoming, with Chair Janet Yellen due to speak the following day.
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The Jackson Hole meeting “looks set to dominate trade this week”, wrote Angus Nicholson, market analyst at IG in Melbourne. USA gold dropped 0.7 percent to $1,337.20 an ounce.
The dollar index, which tracks the greenback against a basket of six major currencies, rose 0.4 percent to 94.872 .DXY , pulling away from a six-week low hit last week after minutes of the Fed’s last policy meeting showed rate-setters split on when to hike. Sydney fell 0.2 percent and Shanghai closed 0.8 percent lower, while there were also steep losses in Seoul, Singapore and Taipei.
In China, Sheng Songcheng, head of the People’s Bank of China’s statistics department, said cutting taxes and increasing the fiscal deficit would be more effective than lowering interest rates in bolstering the economy. The Fed’s No.2 policymaker, Stanley Fischer, said on Sunday that the US central bank is close to hitting targets for full employment and 2 percent inflation.
Interest rate futures contracts indicate that the market is pricing in about 50/50 odds of a US rate increase by the end of the year. Wall Street logged modest losses on Friday, ending almost flat for the week.
The Indian currency ended weaker by 25 at 67.06/$.
In commodities, crude oil futures dropped, giving back some of their recent gains that propelled oil into bull market territory. Crude futures have risen nearly $10 a barrel since early August on speculation that Saudi Arabia and other members of the Organisation of the Petroleum Exporting Countries will agree next month to a production freeze deal with non-OPEC producers led by Russian Federation.
USA crude fell 0.6 percent to $48.25 after gaining 9 percent last week, rising for a second straight week.
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Brent crude futures LCOc1 were trading at $49.94 per barrel at 0712 GMT, down 95 cents, or 1.87 percent.
