Investing.com - Gold prices were on track to post their second consecutive monthly loss in March, as a broadly stronger U.S. dollar dampened the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery inched up $1.40, or 0.12%, to trade at $1,186.70 a troy ounce during U.S. morning hours. Prices touched an intraday low of $1,178.30 earlier, the weakest level since March 20.
On Monday, gold lost $15.40, or 1.28%, to close at $1,185.30. Futures were likely to find support at $1,168.70, the low from March 20, and resistance at $1,206.60, the high from March 27.
Gold prices are down almost 3% in March, as the dollar strengthened amid growing expectations for higher interest rates in the U.S. later this year.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.6% to 98.88 early on Tuesday. The index is on track to post a gain of 3% this month.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
The dollar has been bolstered by the diverging outlook for monetary policy in the U.S. compared to other major economies, such as Europe and Japan.
Investors were turning their attention to Friday’s U.S. employment report for February for further indications on the future path of monetary policy.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
Gold fell to a four-month low of $1,141.60 on March 17 amid concerns that the Fed will start raising rates as early as in June, before rallying for seven consecutive sessions after the Federal Reserve projected a slower pace of rate hikes.
Data on Tuesday showed that U.S. consumer confidence improved more than expected in March to reapproach the highest level since 2007.
A separate report revealed that manufacturing activity in the Chicago-area contracted for the second consecutive month in March, fuelling concerns over the U.S. economic outlook.
Elsewhere on the Comex, silver futures for May delivery inched up 3.1 cents, or 0.19%, to trade at $16.70 a troy ounce, while copper for May delivery slumped 2.2 cents, or 0.78%, to trade at $2.760 a pound.