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Spot gold was up 0.1% at $1,888.50 per ounce, as of 1004 GMT. It
hit $1,871.81, its lowest since Feb. 17 earlier in the session.
U.S. gold futures inched up 0.1% at $1,889.80.
"The dollar is extremely strong not only against the euro, but
also against other major currencies... that is clearly an
indication that the foreign exchange side is making it less
attractive to hold gold," said Quantitative Commodity Research
analyst Peter Fertig.
The dollar rose past the psychological level of 130 yen for the
first time since 2002 and was set for its best monthly rise
since May 2012.
For gold, in the event of further downside, the next level on
watch may be at $1,850 an ounce, Yeap Jun Rong, a market
strategist at IG, said in a note.
Gold has declined about 2.5% this month, which could be its
biggest monthly fall since September as the Fed has started to
raise interest rates to tame the fastest U.S. inflation in four
decades.
Higher U.S. interest rates tend to boost the dollar and push up
bond yields, putting pressure on the greenback-denominated gold.
Markets now await the Fed's May 3-4 meeting.
"The Fed is definitively talking about a 50 basis rate hike next
week... Also at the other FOMC meetings this year, they are
going to continue to hike rates to bring inflation down, and
that is the situation which is not beneficial for gold," Fertig
added.
In other metals, spot silver fell 0.3% to $23.21 per ounce,
having hit its lowest since Feb. 11.
Platinum jumped 1.1% to $927.60 and palladium gained 2.6% at
$2,259.93.
(Reporting by Swati Verma and Eileen Soreng in Bengaluru;
Editing by Amy Caren Daniel)
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