Analyst: Gold prices fall as market eyes central banks' gold purchases

Gold prices fell on Monday after recording their biggest one-week gain in three months, with the market focused on gold purchases by central banks, analysts Sybilla Gross and others said.In June, China's central bank did not increase its gold holdings for the second month in a row, but data showed that both the Reserve Bank of India and Poland's central bank increased their holdings of gold. Saxo Bank noted in a report that although gold is erasing some of Friday's gains, investors will be bullish on gold in the long term as uncertainty about the U.S. economy and the unsustainability of the U.S. deficit remain. Gold prices have soared this year, hitting a record high in May, driven by central bank buying, geopolitical tensions and expectations that the Federal Reserve will cut interest rates later this year.