NEW YORK –  For the first time in seven years, gold has fared poorly in August.

Futures have dropped 3% this month as the Federal Reserve moved closer to raising interest rates and bullion purchases for exchange-traded funds slowed. Fed vice chairperson Stanley Fischer said Tuesday that incoming economic data will determine the trajectory of rate increases and expressed optimism that productivity growth will rebound, damping gold’s appeal as a haven.

A pullback this month would be unusual for gold. Even as prices plunged during the past five years, the metal always rose in August as dealers stocked up on jewellery ahead of India’s wedding and festival season. Now, the market is losing momentum after the best first half in almost 40 years.

“Fischer’s comments this morning made me raise my odds for a September rate hike,” Marty McGuire, a managing director-market strategy at TJM Investments in Chicago, said by telephone. “Gold is breaking down a little bit, and it’s been knocking around a trend line that dates from late June.”

Gold futures for December delivery slid 0.8% to settle at $1 316.50/oz at 1:44 p.m. on the Comex in New York, heading for the first August decline since 2009. In the decade to 2015, bullion added 2.2% on average during August, the best month after January. Traders priced in a 34% probability the Fed will raise rates next month, down from 18% at the beginning of August.

Another bearish sign for gold: central banks, the biggest owners of the metal, cut their purchases by 40% in the second quarter compared with the same period a year earlier to the lowest since 2011, according to World Gold Council figures. Emerging-market nations have been adding less gold as the amount of cash they get from exports declined, said John Nugee, a manager of Bank of England reserves in the 1990s.

The BI Global Senior Gold Valuation Peers index dropped 3.9%, with Barrick Gold and Newmont Mining among the biggest decliners. Citigroup analysts cut their six-month stance on the global metals and mining industry to bearish, citing concern that recent gains are unlikely to continue.

In other metals news:
Holdings in bullion-backed exchange traded funds added 0.4 metric ton to 2 032.6 t, according to data compiled by Bloomberg as of Monday. Silver futures for December delivery dropped 1% to $18.673/oz on the Comex. Prices are down 8.2% for the month. On the New York Mercantile Exchange, platinum and palladium fell.