Gold hits 1-week low with data, Fed in driver's seat

New York (Dec 2)  Gold touched a one-week low on Monday as the dollar rose after U.S. data showed that national factory activity rose in November.

Investors are still awaiting nonfarm payrolls and third-quarter GDP data for clues on when the Federal Reserve will begin withdrawing its monetary stimulus.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 57.3 in November—its best showing since April 2011—from 56.4 the prior month.

Gold investors have been concerned that strong recovery could prompt the Fed to begin cutting back its $85 billion in monthly bond purchases, which would further hurt non-interest-bearing assets such as bullion. The U.S. central bank meets on Dec. 17-18, when it could decide the fate of its stimulus.

Spot gold fell 1.9 percent to $1,227 an ounce, heading for its worst daily loss in ten days. It ended November down 5.4 percent, its biggest monthly decline since June and its third consecutive month of losses.