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PRECIOUS-Gold dips, but holds above one-month low on weak U.S. data

Published 29/03/2016, 05:53 pm
PRECIOUS-Gold dips, but holds above one-month low on weak U.S. data
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* Gold eases after small overnight gains

* Dollar nurses losses after soft U.S. consumer spending data

* Traders await Yellen speech at 1620 GMT (Updates prices)

By A. Ananthalakshmi

SINGAPORE, March 29 (Reuters) - Gold dipped slightly on Tuesday, but held above a one-month low on a softer dollar and weak U.S. economic data that dented expectations of an immediate hike in U.S. interest rates.

Traders were waiting to hear from Federal Reserve Chair Janet Yellen later in the session on U.S. interest rate outlook amid recent hawkish comments from other Fed officials.

Spot gold XAU= was down 0.2 percent at $1,218.36 an ounce by 0647 GMT. The metal had fallen to a one-month low of $1,208.15 on Monday, before closing the day up 0.4 percent.

"If (Yellen) reinforces recent sentiment expressed by some governors, we could see further dollar strengthening and corresponding pressure on gold," said INTL FCStone analyst Edward Meir.

"However, our take ... is that she is exceedingly dovish and is loathe to disrupt expectations of a central bank firmly set on a very gradual rate trajectory and one that is gentler in slope than that being sketched out by her colleagues."

Higher rates could hurt demand for non-interest paying gold.

Yellen will be speaking on the economic outlook and monetary policy to the Economic Club of New York at 1620 GMT on Tuesday.

Last week, comments from several Fed officials put investors on guard for the possibility of at least two rate increases this year, triggering a widespread correction across commodities and bolstering the dollar.

Some officials said another rate hike could come as early as next month if the economy maintained its momentum. The Fed raised rates in December for the first time in nearly a decade.

However, some of the expectations for an imminent hike in interest rates were dented after data on Monday showed U.S. consumer spending barely rose in February and inflation retreated. the weak data, economists slashed their first-quarter gross domestic product growth estimates, while the dollar fell 0.2 percent against a basket of major currencies.

PRICES AT 0647 GMT Metal

Last

Change Pct chg

Spot gold

1218.36

-2.29

-0.19 Spot silver

15.185 -0.032

-0.21 Spot platinum

943.5

1.51

0.16 Spot palladium

569.9

2.4

0.42 Comex gold

1218.8

-1.3

-0.11 Comex silver

15.185 -0.005

-0.03

COMEX gold and silver contracts show the most active months

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