LONDON: Gold steadied around $1,330 an ounce on Friday and was on track for its biggest monthly gain in seven as persistent concerns about a slowdown in the US economy hurt the dollar.
Gold has gained nearly 7 percent in February, its biggest monthly rise since July, mostly due to weak data in China and the United States and political and economic turmoil in Ukraine, which lifted demand for the metal as an insurance against risk.
"The weather-related weakness in the US data raises uncertainty, as we still don't know how much is down to the weather, how much is down to the economy and of course the turmoil in some countries around the world may be contributing to a real overall economic slowdown," Macquarie analyst Matthew Turner said.
Spot gold was unchanged at $1,331.15 an ounce by 1259 GMT, below a four-month high of $1,345.35 struck on Wednesday. US gold futures for April delivery were also steady at $1,331.40 an ounce.
In her testimony to the US Senate Banking Committee, Federal Reserve Chair Janet Yellen aknowledged unusually harsh winter weather appears to be behind recent signs of weakness in the US economy, suggesting the central bank was poised to press forward in ratcheting back its stimulus.
The Fed trimmed its monthly bond purchases by $10 billion at each of its previous two meetings.
Its next meeting is scheduled for March 19.
"The next Fed meeting is really the key because by then some of the economic data should have unambiguously not been weather affected and if that still shows a slowdown the Fed might have to change their policy again, which doesn't necessarily mean an end of tapering but may mean some other loosening," Turner said.
European shares dipped and the dollar fell 0.5 percent versus a basket of main currencies, mostly due to euro strength after euro zone inflation data came in above expectations, easing pressure on the European Central Bank to loosen monetary policy next week.
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