Gold drops to 1-month low as dollar rallies on Fed rate hike view

The yellow metal fell to as low as $1207/ounce on Monday, its lowest since 22 February, and at the low, it was down 2.5% on the month.

Gold dropped off on Monday, distancing further off the 1-year high hit earlier this month, and touched a one-month low as US rate hike view kept dollar bulls active.

The yellow metal fell to as low as $1207/ounce on Monday, its lowest since 22 February, and at the low, it was down 2.5% on the month.

The US dollar index, a gauge that measures the strength of the greenback against six major currencies on a trade weighted basis, traded at a 11-day high of $96.40 on Monday.

The index had rallied more than 1.25% last week moving off a 5-month low of $94.58 hit in the prior week.

Gold had been up for the past two months and fetched a high of $1284.40 on 11 March, its highest since early February last year.

Several senior Fed officials have talked hawkish recently and St. Louis Fed President James Bullard was the latest among them. Bullard said a rate hike may be likely as soon as in the next policy meeting in April.

But Bullard also said he was undecided on whether to push for an April rate increase in part because the U.S. central bank will have seen little more economic data in the interim.

Silver and platinum also fell to 3-week lows of $15.11 and $934 respectively while palladium moved last week's 1-week low of $568.80 and rose to a high as $580.70.

All eyes are now on the Fed Chair Janet Yellen as she is due to speak on the U.S. economy and monetary policy on Tuesday that may give more clues on how many rate hikes policymakers are looking at and the timing.

READ MORE