Gold heads for 2nd week of falls as stronger dollar weighs
Gold traded little changed on Friday and was headed for a second straight week of declines, with a stronger dollar weighing on sentiment.
The dollar index hovered near a six-month high hit in the previous session as risk appetite was hurt by political uncertainty in Italy and U.S. government spending cuts that are due to kick in. The U.S. dollar attracted safe-haven inflows, but that weighed on dollar-priced commodities.
FUNDAMENTALS
Spot gold was little changed at $1,580.14 an ounce by 0045 GMT, after finishing February down 5 percent in a fifth consecutive month of declines, its longest stretch of monthly losses in 16 years.
U.S. gold inched up 0.1 percent to $1,580.
The U.S. government is facing $85 billion in cuts across federal programmes on Friday, absent a highly unlikely last-ditch deal, which could slow the U.S. and world economies.
The U.S. economy barely grew in the fourth quarter as the military slashed spending and companies restocked their shelves with less gusto, but growth already appears to be picking up.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3 percent on the day to 1,254.487 tonnes on Feb. 28, the lowest since early August 2012. The fund saw a record monthly outflow of 73.606 tonnes in February.
Inflation in the euro zone fell to 2.0 percent in January, data from the European Union's statistics office showed on Thursday, giving the European Central Bank room to consider a rate cut when it
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