Precious-Gold slips to near two-week low on Fed rate hike bets

Gold fell on Monday, hovering near a two-week low, as investors assessed growing expectations of a Federal Reserve rate hike following hawkish comments from Chair Kevin Warsh as a surge in oil prices further added to inflation concerns.

Spot gold XAU= fell 0.8% to $4,419.38 per ounce by 10:30 a.m. EDT (1430 GMT), having touched its lowest level since August 19 earlier.

Still, the metal remained set for its strongest monthly performance since January, with prices up 9.6% so far.

U.S. gold futures GCcv1 for December delivery dropped 1.2% to $4,473.50.

Gold tumbled more than 3% on Friday, marking its sharpest daily decline since June 10, after Federal Reserve Chair Kevin Warsh signaled at the Jackson Hole symposium that policymakers may need to do more if inflation does not move back toward the central bank's 2% target.

Traders have raised bets on a September rate hike to about 64%, from about 36% before Warsh's comments, according to the CME FedWatch Tool. FEDWATCH/

Markets now await the U.S. ADP employment report and the nonfarm payrolls data due later this week for more cues on the economy and interest rates.

Elsewhere, spot silver XAG= fell 0.4% to $66.1351 per ounce, and is up about 15% this month after hitting its highest since mid-June on Friday.

Platinum XPT= slipped 1.8% to $1,787.63, and palladium XPD= slid nearly 4% to $1,365.09. Both metals were headed for their biggest monthly rise since December.