* Gold drops for third session
* Data on US consumer sentiment supports dollar
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Oct 19 (Reuters) - Gold extended loses to a third
straight session on Monday, as strong data on U.S. consumer
sentiment prompted investors to pare bets the Federal Reserve
will wait until next year to raise interest rates.
Spot gold XAU= fell 0.5 percent to $1,171.66 an ounce by
0639 GMT, while U.S. gold futures GCcv slid nearly 1 percent.
Other precious metals also tracked gold lower.
Bullion has come under pressure after strong U.S. economic
reports towards the end of last week. Data on Friday showed U.S.
consumer sentiment rebounded strongly in early October, while
Thursday data showed a pick-up in core inflation. urn:newsml:reuters.com:*:nL1N12G0QF
The upbeat data helped the dollar move away from seven-week
lows as it kept alive prospects that the Fed could hike interest
rates before year-end. USD/
"Gold is tracking the dollar at the moment," said a trader
in Hong Kong. "After last week's data, some have put a December
rate hike back on the table."
Before the drop on Friday, gold had rallied to a 3-1/2-month
high of $1,190.63 last week as traders believed the Fed could be
forced to delay a rate hike due to sluggishness in the U.S.
economy amid a slack in the global economy.
Uncertainty over the timing remains as other data on Friday
showed a drop in U.S. industrial output.
On Monday, China posted its weakest quarterly economic
growth since the global financial crisis, raising pressure on
policymakers to cut interest rates further and roll out other
support measures to avert a sharper slowdown. urn:newsml:reuters.com:*:nL3N12J1EK
Investor sentiment towards gold was mixed. Hedge funds and
money managers raised their bullish bets in COMEX gold and
silver to near five-month highs in the week ended Oct. 13, U.S.
Commodity Futures Trading Commission data showed on Friday.
urn:newsml:reuters.com:*:nL1N12G1XK
Other data, however, showed a dip in assets of SPDR Gold
Trust, the top gold-backed exchange-traded fund, by 0.89 percent
to 693.75 tonnes on Friday, the first slide in nearly two weeks.
Gold could see more losses in the near term, as it dipped
below the 200-day moving average of $1,175 on Monday.
"Key levels of support (are built) around $1,170-$1,175,
with a move below here opening up $1,150," said MKS Group trader
Sam Laughlin.
PRICES AT 0639 GMT
Metal Last Change Pct chg
Spot gold 1171.66 -5.24 -0.45
Spot silver 15.89 -0.16 -1
Spot platinum 1006 -4.99 -0.49
Spot palladium 687.22 -6 -0.87
Comex gold 1171.7 -11.4 -0.96
Comex silver 15.89 -0.224 -1.39
COMEX gold and silver contracts show the
most active months