Investing.com - Gold prices slumped to a four-week low on Monday, as investors continued to cut holdings of the precious metal on expectations of tighter U.S. monetary policy.
Gold for December delivery on the Comex division of the New York Mercantile Exchange shed $3.30, or 0.29%, to trade at $1,138.10 a troy ounce during European morning hours. It earlier fell to $1,133.80, the lowest since October 5.
Prices of the precious metal lost $23.60, or 1.87%, last week, the largest drop in nine, amid speculation the Federal Reserve may still raise interest rates this year.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December.
Gold had rallied in October as concerns over a global economic slowdown led by China and its impact on U.S. growth prospects had prompted market participants to push back expectations for a rate increase to March 2016.
But the U.S. central bank's hawkish statement last week triggered a sell-off in the bullion market.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. Institute of Supply Management is to release data on October manufacturing activity at 10:00AM ET on Monday, amid expectations for a modest decline.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange dipped 0.8 cents, or 0.35%, to hit a four-week low of $2.309 a pound during morning hours in London.
Copper prices have been under pressure in recent sessions as persistent worries about future demand from top consumer China weighed.
The final Caixin manufacturing purchasing managers’ index for October released earlier rose to 48.3 from September's six-and-a-half year low of 47.2.
Despite the modest uptick, activity still contracted for the eighth straight month, fueling fears the economy may still be losing momentum despite a raft of stimulus measures in recent months.
Meanwhile, the official manufacturing purchasing managers' index published Sunday held steady at 49.8 in October, the weakest level since August 2012. Analysts had expected the index to inch up to 50.0 last month.
A reading below 50.0 indicates industry contraction. Copper traders view Chinese factory activity as an indicator of the nation's copper demand, as the red metal is widely used by the sector.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.