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Gold hits near 5-week low after Fed strikes hawkish note

The chances of a rate hike in September jumped to 30 per cent from 21 per cent, according to CME Group's FedWatch tool.

European shares fell on Monday as top Federal Reserve officials bolstered expectations for a U.S. rate hike this year, while Alstom bucked the weaker trend after a contract win.

Wells Fargo, the nation's largest mortgage lender, rose $1.05, or 2.2 percent, to $49.56 and JPMorgan Chase gained 73 cents, or 1.1 percent, to $66.95. The advances helped Wall Street snap a three-day losing streak.

"Now we are waiting for the next big thing, which is payrolls (U.S.jobs data) on Friday", he added, saying the first batch of Q3 GDP data at the end of October would be key.

After rising to levels a little shy of ¥102 in late NY trading Friday, the greenback topped the threshold early Monday Oceanian time but dipped below the level later.

She did not, however, specify when the Fed would act, further stating that higher interest rates will depend on incoming economic data.

"The Sensex returned strong earnings growth trends during past Fed hike cycles and market returns tended to track earnings growth closely".

"I think the market's getting more comfortable with the idea that the Fed is going to raise rates this year", said Chris Zacarrelli, chief investment officer at Cornerstone Financial Partners. The EUR/USD traded 1.1174, down 0.0017 or -0.16%.

The Dow Jones industrial average was last up 103.58 points, or 0.56 per cent, at 18,498.98.

The dollar added 0.4 percent to 102.24 yen after earlier rising as high as 102.28, its strongest since August 12.The euro was flat at $1.1202, while the dollar index, which tracks the greenback against a basket of six rivals, was down slightly on the day at 95.519 .dxy .

The dollar index rose 0.3 per cent today, continuing to trade at a more than two-week high on higher prospects of a rate increase.

Europe's broad FTSEurofirst 300 index .FTEU3 closed down 0.17 percent, at 1,350.4. US 30-year Treasury bond yields also fell, with their prices rising more than a full point. The yield on the 10-year Treasury note fell to 1.56 percent from 1.63 percent. That increased speculation that an interest rate increase is more likely this year. Oversupply remained a major concern, with US crude stockpiles forecast to have risen by 1.3 million barrels last week, a Reuters poll showed.

"A much stronger U.S. dollar is causing selling pressure today", said Carsten Fritsch of Commerzbank. USA gold futures for December delivery settled up 0.09 percent at $1,327.10.

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Gold hits near 5-week low after Fed strikes hawkish note