Gold slid to a near five-week low on Monday

Gold slid to a near five-week low on Monday after comments from top Federal Reserve officials fuelled speculation that U.S. interest rates would rise sooner rather than later, boosting the dollar.

Speaking at a meeting of leading central bankers in Jackson Hole, Wyoming, Fed chair Janet Yellen said on Friday that an improvement in the economy had boosted the case for another rate rise, while Vice Chair Stanley Fischer said the U.S. central bank was still on track to lift rates this year. FRX/

The CME Group's FedWatch tool showed the market pricing in more than a 30 percent chance of a hike in September, up from 18 percent before Yellen and her deputy Fischer spoke.

Spot gold XAU= touched its lowest since July 26 at $1,314.70, and was down 0.1 percent at $1,319.80 an ounce at 1345 GMT. U.S. gold futures GCv1 for December delivery were down $2.60 an ounce at $1,323.30.

"Weakness in gold prices is likely to extend over the next weeks, and we expect gold to steadily slide to $1,270 and below," Pradeep Unni, head of trading and research at Richcomm Global Services, said.

"The case for a September rate hike seems to have clearly increased and most economic data feeds are showing improvements," he said. "September and December hikes seem to be on the cards and any further strength in data feeds will only (reinforce) this view."

Gold's volatility tracked fluctuations in the dollar. The U.S. currency gave up gains soon after Yellen spoke as she gave no indication that a rate hike was imminent, but rebounded as traders reassessed her words, and after Fischer spoke. FRX/

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

"The pressure on gold will likely increase as we go into September, as participants are now more willing to bet on a rate hike given what they have gleaned from top Fed officials on Friday," INTL FCStone said in a note.

Hedge funds and money managers increased their net long position in COMEX gold contracts in the week to Aug. 23, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. XAG= was little changed at $18.61 an ounce, having earlier touched its lowest in more than eight weeks at $18.36 an ounce.

Platinum XPT= , the biggest faller among the major precious metals last week, was up 0.4 percent at $1,072 an ounce, while palladium XPD= was up 0.5 percent at $688.60 an ounce.