Gold slips to fresh multi-week lows after Dudley's comments
Gold prices fell to the lowest level in around four weeks in North American trade on Monday, after Federal Reserve Bank of New York President William Dudley gave an upbeat assessment of the economy and warned against the central bank taking a pause in the tightening cycle.Comex gold futures were at $1,251.20 a troy ounce by 9:05AM ET (1305GMT), down $5.30, or around 0.4%. Prices fell to $1,249.80 earlier in the session, a level not seen since May 24.Gold prices lost $13.20, or roughly 1.2%, last week, the second weekly decline in a row, after the Fed raised interest rates and kept the door open for another hike in 2017.Also on the Comex, silver futures were down 7.5 cents, or around 0.5%, to $16.59 a troy ounce, after hitting its lowest since May 19 at $16.56.In a business roundtable held in Plattsburg, New York, Dudley said U.S. inflation is a bit low but should rise alongside wages as the labor market continues to improve, allowing the Fed to continue gradually tightening U.S. monetary policy.The remarks echoed similar comments made by Fed Chair Janet Yellen in last week’s press conference after the central bank hiked rates for the second time this year.Later in the global day, Chicago Fed President Charles Evans will speak about current economic conditions and monetary policy at an event in New York City.They are the first of a slew of Fed appearances scheduled for this week including Vice Chairman Stanley Fischer and Governor Jerome Powell.Last week, the Fed raised interest rates as widely expected and maintained plans to go ahead with another rate hike by year-end. The central bank also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet.Despite the Fed's relatively hawkish message, market players remained doubtful over its ability to raise rates as much as it would like before the end of the year due to a recent run of disappointing U.S. economic data.Futures traders are pricing in less than a 20% chance of a hike at the Fed's September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 40%.Meanwhile, market players geared up ahead of Brexit negotiations between the U.K. and the European Union. Britain's Brexit minister David Davis and the EU's chief negotiator Michel Barnier are due to start negotiations over Britain's departure from the bloc in Brussels on Monday, kicking off a two-year divorce process due to end by March 2019.The discussions come less than two weeks after Theresa May and her Conservative Party lost their overall majority in parliament. Fighting for her political survival, May has been trying to strike a deal with a the Democratic Unionist Party, a small Northern Irish Protestant party.