Gold price inches down on steady dollar, Fed rate hike remains on cards

Gold edged lower early on Monday as the dollar strengthened after hawkish comments from Federal Reserve Chair Janet Yellen left the door open for a US interest hike as early as next month.

FUNDAMENTALS

* Spot gold had dipped 0.33 percent to USD 1,316.46 per ounce at 0120 GMT. The metal closed last week down 1.5 percent.

* US gold futures fell 0.48 percent to USD 1,319.60.

* The case for raising US interest rates has strengthened in recent months because of improvements in the labour market and expectations for moderate economic growth, Fed Chair Janet Yellen said on Friday.

* Gold is highly-sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

* The dollar stood tall in Asian trading on Monday, after Yellen`s upbeat comments on the US economy.

* The dollar index, which tracks the greenback against a basket of six rivals, was steady at 95.551, not far from Friday`s high of 95.594, its loftiest level since Aug. 16.

* Hedge funds and money managers increased their net long position in COMEX gold contracts in the week to Aug. 23, while they cut it in silver, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

* Mired in a world of low growth, low inflation and low interest rates, officials from the Fed, Bank of Japan and the European Central Bank said their efforts to bolster the economy through monetary policy may falter unless elected leaders stepped forward with bold measures.

* Venezuela has signed over USD 5.5 billion in mining deals with companies including Canada`s Barrick Gold Corp, the world`s largest gold producer, and China`s Shandong Gold, President Nicolas Maduro said on Friday.

MARKET NEWS

* Most Asian share markets slipped on Monday after Yellen indicated an interest rate increase remains on the cards for this year. MSCI`s broadest index of Asia-Pacific shares outside Japan slid 0.7 percent.

* Oil prices fell early on Monday as output from Iraq rose and as Iran said it would only cooperate in upcoming producer talks to freeze output if fellow exporters recognised its right to fully regain market share.