July 22 (Reuters) - Gold prices inched lower on Monday,
extending losses after the metal hit a six-year peak on Friday,
as investors rolled back expectations for a sharp interest rate
cut at the end of this month, while tensions in the Middle East
limited losses for the bullion.
FUNDAMENTALS
* Spot gold XAU= was down 0.2% at $1,422.74 per ounce as
of 0137 GMT. The metal hit $1,452.60 in the previous session,
its highest since May 2013, before closing 1.5% lower.
* U.S. gold futures GCv1 were down 0.2% at $1,424.10 an
ounce.
* Expectations of an aggressive interest rate cut rose after
New York Federal Reserve President John Williams argued for
pre-emptive stimulus in a speech last week.
* But a subsequent clarification that his remarks were
academic and "not about potential policy actions" shredded
prospects for a 50-basis-point rate cut at the end of the month.
* The Wall Street Journal reported the Fed was likely to cut
rates by 25 bps when it meets later this month, and may make
further cuts in the future given global growth and trade
uncertainties. * Expectations for a rate cut of half a percentage point at
the Fed's July 30-31 meeting edged out further on Monday to hit
14.5%, according to CME's FedWatch tool, down from as high as
71% last week.
* The dollar index .DXY was up 0.1% against a basket of
major currencies on Monday. USD/
* Meanwhile, confrontation in the global oil trade's most
important waterway has escalated with footage showing the
Iranian military defying a British warship when it seized a
tanker in the Strait of Hormuz on Friday. * SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.72% to 820.49
tonnes on Friday from 814.62 tonnes on Thursday. GOL/ETF
* Hedge funds and money managers raised their bullish stance
in COMEX gold in the week to July 16, the U.S. Commodity Futures
Trading Commission (CFTC) said in a report on Friday.
* Consumers in leading Asian hubs continued to sell off
physical gold this week, with some switching their holdings to
silver, after a jump in prices that also attracted interest from
investors betting further gains. GOL/AS
* Russia's gold reserves stood at 71.0 million troy ounces
as of the start of July, the central bank said on Friday.