PRECIOUS-Gold falls 1.5 pct on US rate outlook, platinum at 6-1/2 year low – Reuters


* Gold traders await U.S. data this week for cues

* VW emissions scandal further weighs on platinum

(Updates prices, adds comment)

By Clara Denina

LONDON, Sept 28 (Reuters) – Gold dropped 1.5 percent on
Monday, down for a second session as the dollar stood close to a
five-week high ahead of a key U.S. jobs report later in the
week, which could boost bets the Federal Reserve will raise
interest rates this year.

Platinum fell almost 3 percent to a 6-1/2 year low of
$916.50 an ounce.

It posted its biggest weekly drop since July last week on
fears the Volkswagen emissions scandal could dent demand for
diesel cars, in which it is used in catalysts.

“I would not over-interpret the impact of the Volkswagen
emissions scandal on the platinum market in the medium term,
although this is having a physiological effect right now…and
we should be prepared for even more negative news, which could
weigh on prices,” Commerzbank analyst Daniel Briesemann said.

Spot gold fell 1.5 percent to a session low of
$1,127.70 an ounce, its biggest fall in 3 weeks, and was trading
down 1.3 percent at $1,131.42 by 1353 GMT. Prices extended
Friday’s declines made after Fed chair Janet Yellen said she
expected to begin raising rates later in 2015.

Several Fed officials are scheduled to speak this week,
keeping the focus firmly on U.S. monetary policy. Traders will
also be closely monitoring economic data, including non-farm
payrolls due on Friday, to gauge the strength of the economy.

Non-interest-paying gold has lost about 3 percent this year
on fears that demand could take a hit in a higher interest
rates’ environment.

Data on Friday supported the view that the Fed could begin
raising rates over the next months. U.S. gross domestic product
rose at a 3.9-percent annual pace in the second quarter, up from
the 3.7 percent reported last month.

The Fed has said the timing of a rate rise would be data
dependent.

“Interest around $1,141 should continue to support gold over
the short-term, while $1,155 will provide resistance,” MKS Group
said in a note.

Earlier in the month, the Fed delayed a long-anticipated
rise in U.S. rates, citing concerns over the global economy and
improving investor sentiment towards gold. Holdings in SPDR Gold
Trust, the world’s top gold-backed exchange-traded fund, rose
for a fourth straight session on Friday.

Hedge funds and money managers raised their bullish bets in
COMEX gold futures and in the week to Sept. 22, U.S. Commodity
Futures Trading Commission data showed on Friday.

Palladium fell 2 percent to $648.22 an ounce,
following a near 10 percent jump last week, its biggest weekly
gain since December 2011. Silver fell 3.4 percent to
$14.57 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Louise Heavens and David Evans)