Gold in longest stretch of fall since May as Fed bets climb

Gold today dropped for a seventh day, heading for the longest run of declines since May, and silver fell to a two-month low as comments from leading central bankers boosted speculation that US interest rates may rise as soon as next month, buoying the dollar.

Gold lost 0.5 percent to USD 1,314.99 an ounce, the lowest since July 26. Silver also slumped to the lowest level since June 30. Silver lost 1.4 per cent to USD 18.39 an ounce.

Gold's rally this year has been pegged back as a September rate hike is now on the cards after Federal Reserve Chair Janet Yellen said on Friday that the case for tightening had strengthened, while her deputy, Stanley Fischer, said an increase at the September 20-21 meeting was possible.

On Saturday, Bank of Japan Governor Haruhiko Kuroda reiterated a pledge to ease policy further if necessary, potentially hurting the yen.

The focus this week will be on Friday's US non-farm payroll numbers, and should the reading again be strong, a further selloff of gold can be expected.