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MANILA — Gold hovered just above its lowest level since 2010 yesterday, struggling to move higher as the market expects the US Federal Reserve to move closer to raising interest rates. The Fed will hold a two-day meeting that ends tomorrow at which policy makers are likely to send more signals pointing to a rate rise later in the year as the US economy strengthens. That is negative for noninterest-paying bullion.

Spot gold was flat at $1 097,96 per ounce by 2.29am GMT after falling for a fifth consecutive week last week, the longest run since late 2012.

Bullion lost more than 3 percent last week after a rout on Monday accompanied by big volume in New York and Shanghai that sparked more sell-offs and pulled the price as low as $1 077 on Friday, its cheapest since February 2010.

US gold for August delivery gained 1,1 percent to $1 097,50 per ounce yesterday. Gold’s recovery from last week’s low appeared to be mostly due to short-covering, said HSBC analyst James Steel.

“So while we think prices may firm near-term, the sell-off does not look as if it’s entirely over as we do not yet detect a notable change in investor sentiment.”

US speculators turned bearish on Comex gold for the first time since at least 2006 in the week ended July 21, US government data showed on Friday.

As gold prices tumbled, holdings of the world’s biggest gold-backed exchange-traded fund, the SPDR Gold Trust, fell for a seventh day on Friday to 21,87 million ounces, the lowest since September 2008. — Reuters.