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Gold retreated to a two-week low overnight as the US dollar recouped losses on stronger-than-expected US economic data, setting bullion on course for its first monthly decline in the last five.

Spot gold fell 0.4 per cent to $US1,314 per ounce after hitting a low of $US1,312.43, its weakest since February 15.

US gold futures settled down 0.4 per cent at $US1,316.1.

‘Gold is more data-driven at the moment. We had the better gross domestic product (GDP) data and that was the biggest driver for the pullback,’ said Phil Streible, senior commodities strategist at RJO Futures in Chicago.

Gold was hurt by the US dollar’s advance following the release of the data, he added.

The US dollar regained some momentum versus six major currencies after the US Commerce Department’s report showed a 2.6 per cent annualised rate increase in gross domestic product for the fourth quarter.

Economists polled by Reuters had forecast GDP to grow 2.3 per cent in the fourth quarter.

The strong GDP data came after US Federal Reserve Chairman Jerome Powell said the central bank was in no hurry to decide on future interest rates hikes.

‘From a technical point of view, a fall below $US1,320 could open space for further a decline to $US1,300, an area which is likely to stop the short-term bearish scenario,’ ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Investors are monitoring tensions between India and Pakistan which have engaged in retaliatory attacks, and developments on the US-China trade talks.

Gold is considered a safe asset during times of economic or political uncertainty.

Among other precious metals, spot palladium rose 0.9 per cent to $US1,542 per ounce, after retreating from its all-time peak of $US1,565.09 scaled earlier in the week.

The metal recorded its biggest monthly percentage gain since November 2016.

‘Palladium is the bitcoin of metals. Any pullback is going to be a buying opportunity rather than a selling opportunity. Also there are some difficulties mining it,’ said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.

The autocatalyst metal has surged about 22 per cent so far this year amid tightening supply in the market.

Spot silver fell 1 per cent to $US15.58 per ounce and was down about 3 per cent for the month, its weakest since August.

Platinum rose 0.3 per cent to $US867, after hitting its highest since November 7 at $US876 earlier in the session.

Prices also marked their biggest monthly gain since January 2018, having risen more than five per cent.