(Writes through, adds quotes, updates prices)
* Gold fell for 5th straight week, longest losing run since
2012
* FOMC meets Tues-Wed, seen sending further rate hike
signals
* Bearish momentum seen staying, Chinese stocks take major
dive
By Veronica Brown and Manolo Serapio Jr
LONDON, July 27 (Reuters) - Gold lost ground on Monday,
moving closer to last week's 5-1/2 year lows below $1,100 per
ounce, with expectations for a near-term U.S. interest rate hike
seen keeping momentum firmly with the bears.
While the market has been fixated on U.S. monetary policy,
traders said further selling on Monday may have come on the back
of a need to cover losses elsewhere as Chinese stock market
indexes experienced their biggest one-day loss since 2007.
ID:nL3N1072VY
The Federal Reserve will hold a two-day meeting this week
where policymakers are likely to send more signals pointing to a
rate rise later in the year as the U.S. economy strengthens.
Spot gold XAU= was down 0.5 percent at $1,092.90 an ounce
by 1158 GMT, after falling for a fifth straight week last week,
the longest slide since late 2012.
U.S. gold for August delivery GCcv1 was up 0.6 percent at
$1,092 an ounce.
Bullion lost more than 3 percent last week after a sudden,
sharp rout across New York and Shanghai markets sparked further
selling, sinking prices to $1,077 on Friday, their lowest since
February 2010.
"Gold was doing OK for a while today but that didn't last
very long as sentiment is pretty much overwhelmingly one-sided,"
SocGen analyst Robin Bhar said.
"It shouldn't be a major surprise as we are very much stuck
in a bear trend."
The drop in gold came despite the dollar staying on the back
foot .DXY , falling against a basket of currencies after a drop
in U.S. stocks and bond yields.
U.S. speculators turned bearish on Comex gold for the first
time since at least 2006 in the week ended July 21, U.S.
government data showed on Friday. ID:nL1N1041ZT
Holdings of the world's biggest gold-backed exchange-traded
fund, the SPDR Gold Trust GLD , also fell for a seventh day on
Friday to 21.87 million ounces, the lowest since September 2008.
GOL/ETF
The U.S. rate outlook kept a tight grip on sentiment.
Based on forecasts mistakenly released on Friday, staff
economists at the Federal Reserve expect a quarter-point rate
increase this year. The Fed later said it was not the correct
document and gave a new table showing a slightly lower forecast
for gross domestic product and inflation in 2015.
ID:nL1N104197
At this week's meeting, the Fed is unlikely to deviate from
its recent policy statement or Fed Chair Janet Yellen's
congressional testimony this month, Mizuho Bank said.
"The most likely outcome is that Fed rhetoric will emphasise
that the U.S. economy is on track for a rate hike(s) this year,"
the bank said in a note.
In other precious metals, spot palladium XPD= fell 0.2
percent to $621.25 an ounce and platinum XPT= lost 0.7 percent
to $975.74. Silver XAG= was down 0.5 percent at $14.56.
(Editing by Jason Neely and Pravin Char)