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PRECIOUS-Gold at 1-month low on dollar ahead of U.S. data, Fed speeches

Published 28/03/2016, 08:22 pm
© Reuters.  PRECIOUS-Gold at 1-month low on dollar ahead of U.S. data, Fed speeches
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* Prospect of U.S. rate hike as soon as April weighs

* Gold fell 3 percent last week, the most since November

* Coming Up: U.S. pending home sales; 1400 GMT (Updates throughout, changes dateline from MANILA)

By Clara Denina

LONDON, March 28 (Reuters) - Gold hit its lowest in a month on Monday, as the dollar firmed ahead of new U.S. economic data and speeches by Federal Reserve officials that may signal more interest rate increases than anticipated.

All eyes will be on Fed Chair Janet Yellen who speaks on the U.S. economy and monetary policy on Tuesday, with investors looking for further clues on the number and timing of rate hikes this year.

Spot gold XAU= was down 0.1 percent at $1,214.86 an ounce by 0903 GMT, after touching a session low of $1,208.15, its cheapest since Feb. 23. The metal lost 3 percent last week, its biggest weekly loss since November on speculation that the next U.S. rate increase could come as soon as next month.

Liquidity was thin as London and many other gold markets were closed for the Easter Monday holiday.

"Gold's short-term technical trend has slightly deteriorated, with the $1,190-$1,200 level becoming a strong support area," said Carlo Alberto de Casa, ActivTrades chief analyst.

Hawkish comments from several U.S. Federal Reserve officials last week put investors on guard for the possibility of at least two rates increases this year, triggering a widespread correction across commodities and bolstering the dollar, in which they are denominated.

"While we have stated that Fed tightening may not be as negative for gold as in previous tightening cycles, an April rate rise would likely knock gold lower near term," HSBC said in a note.

The dollar hit a 1-1/2-week high versus a basket of currencies .DXY ahead of U.S. non-farm payrolls and the manufacturing purchasing managers index on Friday.

"A non-farm payrolls number above 200,000 could give the market enough confidence to price in two rate hikes this year, weighing on gold," ActivTrades' de Casa said.

The market focus will also be on New York Fed President William Dudley's speech and the Chicago purchasing managers index (PMI) on Thursday. ECONUS

Inflows into gold exchange-traded funds (ETF) continued, however, suggesting that some confidence in bullion remained.

Holdings in the SPDR Gold Trust GLD , the world's largest gold-backed ETF, rose to its highest since December 2013 at 26.48 million ounces on Thursday, the latest available data shows. HLDSPDRGT=XAU

Hedge funds and money managers increased their bullish positions in COMEX gold in the week to March 22, when the metal rallied more than 1 percent after deadly bomb attacks hit Brussels, U.S. Commodity Futures Trading Commission data showed on Friday.

Russia and Kazakhstan added to their bullion reserves in February, while Malaysia and Turkey cut their holdings, data from the International Monetary Fund showed on Friday. silver XAG= gained 0.1 percent to $15.17 an ounce, palladium XPD= rose 0.9 percent to $577.20 and platinum XPT= was unchanged at $946.50 an ounce.

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