Gold eyes first monthly fall in five as US data boosts dollar

Gold retreated to a two-week low on Thursday as the dollar recouped losses after stronger-than-expected economic data from the United States, setting bullion on course for its first monthly decline in the last five.

As of 10:47 am EST (1547 GMT), spot gold was 0.4 percent lower at $1,315.35 per ounce, having earlier hit a low of $1,312.43, its weakest since Feb. 15.

U.S. gold futures were down 0.3 percent at $1,316.80.

"Gold is more data-driven at the moment. We had the better gross domestic product (GDP) data and that was the biggest driver for the pullback," said Phil Streible, senior commodities strategist at RJO Futures in Chicago

Gold was hurt by the dollar's shift into positive territory following the release of the data, he added.

The dollar regained some momentum versus six major currencies after the U.S. Commerce Department's report showed a 2.6 percent annualised rate increase in gross domestic product for the fourth quarter.

Economists polled by Reuters had forecast GDP to grow 2.3 percent in the fourth quarter.

The strong GDP data comes after U.S. Federal Reserve Chairman Jerome Powell said that the central bank was in no hurry to decide on future interest rates hikes.

"From a technical point of view, a fall below $1,320 could open space for further a decline to $1,300, an area which is likely to stop the short-term bearish scenario," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Investors are now monitoring tensions between India and Pakistan, where the two countries have engaged in retaliatory attacks, as well as developments on the U.S.-China trade front.

Gold is considered a safe asset to invest in during times of economic or political uncertainty.

In other precious metals, spot palladium rose 1.3 percent to $1,549, after retreating from its all-time peak of 1,565.09 per ounce scaled earlier in the week.

"Palladium is the bitcoin of metals. Any pullback is going to be a buying opportunity rather than a selling opportunity. Also there are some difficulties mining it," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.

The autocatalyst metal has surged about 22 percent so far this year amid tightening supply in the market.

Spot silver fell 0.6 percent to $15.65 per ounce.

Platinum was 0.6 percent higher at $870, after hitting its highest since Nov. 7 last year at $876 earlier in the session.