Gold fell on Tuesday and was heading for a third straight quarterly fall, pressured by a strong dollar and expectations the U.S. Federal Reserve will increase interest rates this year.
Bullion has fallen 3 percent since hitting a three-week high above $1,200 an ounce last week after Federal Reserve Chairwoman Janet Yellen on Friday signalled a rate hike could be likely later this year.
Yellen’s remarks on sustained gains in the U.S. economy halted a 7-day rally in bullion — the longest winning streak since 2012 — which had been spurred by hopes the Fed would take it slow in raising rates.
“We’ve always said that at some point everyone is going to expect a rate rise, so the impact should start being more and more priced in,” Macquarie analyst Matthew Turner said.
“But Yellen has made it quite clear that the rate rises are going to be conditional on economic performance and … she’s kept the guessing game going.”
Spot gold was down 0.5 percent at $1,179.61 an ounce by 0904 GMT, while U.S. gold for April delivery edged down 0.4 percent to $1,179.80 an ounce.
Spot prices have lost 2.5 percent so far in March and were heading for a second month of losses.
The dollar was on track for its best quarter since 2008 against a basket of major currencies, boosted as the Fed moves towards raising rates while most other major central banks are loosening monetary policy.
Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the U.S. economy, could further reduce demand for assets perceived as safer such as gold. A stronger dollar also makes gold more expensive for holders of other currencies and typically erodes its appeal.
Investors were awaiting U.S. jobs data on Friday, with a robust report likely to increase chances policymakers could raise U.S. rates sooner than later.
Economists polled by Reuters forecast a 245,000-gain in U.S. jobs in March. U.S. jobs increased by 295,000 in February, marking the 12th straight month that employment gains have been above 200,000 — the longest such run since 1994.
But outside the labour market, there were still signs that the U.S. economy hit a soft patch in the first quarter.
In other precious metals, spot palladium climbed 1.1 percent to $733.98 an ounce, after dropping to a 13-month low of $721.98 on Monday.
Spot silver fell 0.9 percent to $16.51 an ounce, while platinum rose 0.7 percent to $1,123 an ounce.