Hedge funds rapidly exit gold amid Fed outlook

Hedge funds exited gold at the fastest pace in more than four months on mounting speculation the Federal Reserve is getting closer to raising US interest rates that have been near zero since 2008.

Money managers cut their net-long wagers for a sixth week, US government data show. Investors sold 18.9 metric tons of bullion held through exchange-traded products last week, the biggest reduction since November.

Fed policymakers will meet this week, and key to their debate will be whether the US economy has gained enough steam to warrant removing a pledge to be "patient" on raising borrowing costs in a statement scheduled for Wednesday. Gains in the labor market are increasing the chances the Fed will raise rates, eroding the haven appeal of gold and sending investors to assets with better yield prospects such as bonds and equities.