Gold grew near to its weakest level

Gold

On Tuesday, Gold grew near to its weakest level since early 2010 with no meaningful recovery seen as expectations for a US interest rate increase grow. The Federal Reserve begins a two-day meeting later in the day where policymakers are likely to signal further that a rate increase later in the year is certain as the U.S. economy strengthens.

Spot gold was flat at $1,093.45 an ounce by 0051 GMT. Bullion fall down to as low as $1,077 on Friday, its cheapest since Feb month 2010. Amid weaker gold prices, holdings of the world`s biggest gold-backed exchange-traded fund, the SPDR Gold Trust , fall for a 7th day on Friday to 21.87 million ounces, the lowest since September 2008.

Also weighing on sentiment, China`s net gold imports from main conduit Hong Kong fall to a 10-month low in June, reflecting weak requirement from the major consuming nation. Money managers, who have been cooling on gold for few time, previous week held more short positions than long ones in the precious metal for the 1st time in nearly a decade, Bank of America said, suggesting an estimation prices will continue to fall.

Speculators assume more falls in commodities, as worries about China and higher interest rates combine with waning sentiment to suggest markets are heading further south.