LONDON: Gold dropped 1.5 percent on Monday, down for a second session as the dollar stood close to a five-week high ahead of a key US jobs report later in the week, which could boost bets the Federal Reserve will raise interest rates this year.

Spot gold fell 1.5 percent to a session low of $1,127.70 an ounce, its biggest fall in 3 weeks, and was trading down 1.3 percent at $1,131.42 by 1353 GMT.

Palladium fell 2 percent to $648.22 an ounce, following a near 10 percent jump last week, its biggest weekly gain since December 2011. Silver fell 3.4 percent to $14.57 an ounce.

Gold prices extended Friday’s declines made after Fed chairperson Janet Yellen said she expected to begin raising rates later in 2015.

Several Fed officials are scheduled to speak this week, keeping the focus firmly on US monetary policy. Traders will also be closely monitoring economic data, including non-farm payrolls due on Friday, to gauge the strength of the economy.

Non-interest-paying gold has lost about 3 percent this year on fears that demand could take a hit in a higher interest rates’ environment.

Data on Friday supported the view that the Fed could begin raising rates over the next months. US gross domestic product rose at a 3.9-percent annual pace in the second quarter, up from the 3.7 percent reported last month.

The Fed has said the timing of a rate rise would be data dependent.

“Interest around $1,141 should continue to support gold over the short-term, while $1,155 will provide resistance,” MKS Group said in a note.