Gold rebounds, heads for fifth monthly gain as dollar retreats

Gold rebounded on Thursday from a near two-week low touched in the previous session as the dollar retreated, keeping bullion on track for a fifth straight monthly gain, while investors awaited economic data from the United States and clarity on its trade talks with China.

As of 1108 GMT, spot gold was 0.4 percent higher at $1,324.80 per ounce, having hit its lowest since Feb. 15 at $1,316.43 on Wednesday.

U.S. gold futures were up 0.4 percent at $1,326.40.

"We expect gold prices to go slightly above these levels on expectations that the dollar will continue weakening," Natixis analyst Bernard Dahdah said.

"The prospects for growth (in the U.S.) are more limited than they were last year."

The dollar softened versus a basket of six other currencies, giving up some gains from the previous session after U.S. Trade Representative Robert Lighthizer's comments marred expectations of progress in trade talks with Beijing.

Lighthizer stated in a Congressional hearing that it was "too early" to predict the outcome of ongoing trade talks and that the United States would need to maintain tariffs-threats on Chinese goods for years even if the two sides strike a deal.

Investors now await fourth-quarter GDP data from the United States at 1330 GMT for clues on the country's economic health. Economic data from elsewhere has been disappointing, especially in China, adding to concerns about a global slowdown.

Gold is considered a safe store of value during times of economic or political uncertainty.

Analysts said markets were also monitoring the tensions between India and Pakistan, where the two countries have engaged in retaliatory attacks.

Adding to bullion's appeal was U.S. Federal Reserve Chairman Jerome Powell's testimony to the Senate Banking Committee on Tuesday, where he reiterated the Fed would be patient with its policy on interest rates.

The metal has maintained a robust trajectory this year,  rising nearly 14 percent from its one-and-half year trough in mid-August.

"Gold is going through a period of consolidation, which we were in need of with the Relative Strength Indicator going above 70," said Ross Norman, chief executive at Sharps Pixley.

Spot palladium rose 0.8 percent to $1,540 on Thursday, after retreating from its all-time peak of 1,565.09 per ounce scaled earlier in the week.

The autocatalyst surged about 22 percent so far this year on widening supply tightness in the market.

Spot silver rose 0.3 percent to $15.79 per ounce.

Platinum traded 1.1 percent higher at $874, close to its highest since Nov. 7 last year at $875, hit earlier in the session.