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[LONDON] Gold fell on Tuesday and was heading for a third straight quarterly fall, pressured by a strong dollar and expectations the US Federal Reserve will increase interest rates this year.
Bullion has fallen 3 per cent since hitting a three-week high above US$1,200 an ounce last week after Federal Reserve Chairwoman Janet Yellen on Friday signalled a rate hike could be likely later this year.
Ms Yellen's remarks on sustained gains in the US 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 Ms 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 per cent at US$1,179.61 an ounce by 0904 GMT, while US gold for April delivery edged down 0.4 per cent to US$1,179.80 an ounce.
Spot prices have lost 2.5 per cent 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 US 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 US jobs data on Friday, with a robust report likely to increase chances policymakers could raise US rates sooner than later.
Economists polled by Reuters forecast a 245,000-gain in US jobs in March. US 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 US economy hit a soft patch in the first quarter.
In other precious metals, spot palladium climbed 1.1 per cent to US$733.98 an ounce, after dropping to a 13-month low of US$721.98 on Monday.
Spot silver fell 0.9 per cent to US$16.51 an ounce, while platinum rose 0.7 per cent to US$1,123 an ounce.