Investing.com - Gold prices came off the lowest levels of the session on Monday, after plunging to a five-year trough, amid speculation the Federal Reserve is moving closer to raising interest rates for the first time in eight years.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $1,080.00 a troy ounce, a level not seen since February 2010, before recovering to trade at $1,112.40 during U.S. morning hours, down $19.50, or 1.72%.
Gold plunged by as much as 5.3% in a matter of minutes during early Asian morning hours as a bout of technical selling kicked in after prices broke below a key support level close to the $1,120-level, triggering fresh sell orders amid bearish chart signals.
Prices of the precious metal slumped $27.20, or 2.24%, last week, the fourth straight weekly loss, amid rising bets that a rate hike is coming in September.
Gold, which yields nothing and costs money to hold, is seen as a less attractive investment during times of rising interest rates.
Also on the Comex, silver futures for September delivery slumped 14.2 cents, or 0.96%, to trade at $14.69 a troy ounce, while copper for September delivery shed 2.0 cents, or 0.79%, to trade at $2.476 a pound.
Meanwhile, the dollar marched higher against its major counterparts as upbeat U.S. inflation and housing data on Friday added to expectations for an interest rate hike this fall.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 98.09 after hitting a seven-week high of 98.19 earlier.
A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.
Greek banks reopened on Monday for the first time in three weeks, but restrictions on cash withdrawals remained in place. Customers are now allowed to withdraw €420 a week, rather than the €60 a day previously imposed.
The debt-strapped nation made a €6.8 billion debt payment to its international creditors on Monday, after receiving an EU bridge loan of €7.16 billion on Friday.