* Markets await Fed Chair Janet Yellen's Friday speech
* Spot gold may retest a resistance at $1,252 - technicals
(Adds comment, updates prices)
By Sethuraman N R
March 2 Gold prices dropped on Thursday as the
dollar firmed on hawkish comments from U.S. Federal Reserve
officials that stoked expectations of a U.S. interest rate hike
Spot gold fell 0.4 percent to $1,244.72 per ounce by
0715 GMT. On Monday, the metal rose to $1,263.80, its highest
since Nov. 11.
U.S. gold futures fell 0.3 percent to $1,245.30.
The dollar index , a measure of the greenback against
a basket of six other major currencies, hit 102, its highest
since Jan. 11.
"Gold price may see a little bit of selling pressure at this
moment on hawkish comments coming from the Fed officials. The
interest rate hike in March is very likely and almost written on
the wall," said Mark To, head of research at Hong Kong's Wing
Fung Financial Group.
"We can also see that the general political climate
worldwide is changing. Even people who are not interested in
gold, but tend to be risk-averse, are investing in gold for
Despite the hawkish rate backdrop, gold has been performing
impressively considering that U.S. equity markets also surged to
new highs, INTL FCStone analyst Edward Meir said.
The Dow Jones Industrial Average blasted through the
21,000-point mark for the first time on Wednesday.
U.S. consumer spending cooled in January as demand for
automobiles and utilities fell, but inflation recorded its
biggest monthly increase in four years.
Fed Governor Lael Brained on Wednesday said that it may be
"appropriate soon" to raise interest rates as the global economy
seems to have turned a corner.
More Fed policy-setters, including Chairwoman Janet Yellen
and Vice Chairman Stanley Fischer, will speak on Friday, likely
providing further signals on the Fed's policy path ahead of the
March 14-15 meeting.
Spot gold may retest a resistance at $1,252 per ounce, a
break above which could lead to a gain to the next resistance at
$1,258, according to Reuters technical analyst Wang Tao.
"If we look at gold’s performance over the course of the
last five trading sessions, prices have hardly dropped at all,
telling us that funds remain committed to the precious metal in
light of what they view to be an uncertain U.S. legislative
outlook," Meir said.
"In addition, funds do not want to get too short ahead of
the critical French elections."
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, rose 0.28 percent to 843.54
tonnes on Wednesday from 841.17 tonnes on Tuesday.
Spot silver fell 0.3 percent to $18.35 an ounce.
Platinum was down 0.2 percent at $1,012.90, while
palladium dropped 0.3 percent to $772.93.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by
Christian Schmollinger and Sunil Nair)