Gold holds firm as Fed rate hike guidance weighs on dollar

REUTERS - Gold prices edged up on Monday as the dollar stayed on the defensive, finding support from the U.S. Federal Reserve's conservative guidance on the path of rate hikes this year.

FUNDAMENTALS

* Spot gold was up 0.2 percent to $1,231.05 per ounce by 0100 GMT.

* U.S. gold futures were mostly unchanged at $1,230.80.

* The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent to 100.230.

* Markets were bracing for a packed week of Fed messaging with no less than nine different policy makers set to speak, including Chair Janet Yellen on Thursday.

* Yellen's cautious guidance last week has investors pricing in almost no chance of another rate rise at the next policy meeting in May, rising to around 50-50 for June. [FEDWATCH]

* Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.35 percent to 834.10 tonnes on Friday from 837.06 tonnes on Thursday.

* Hedge funds and money managers slashed their net long position in COMEX gold for the second straight week in the week to March 14, and also cut long positions in silver, U.S. Commodity Futures Trading Commission data showed on Friday.

* Money managers cut their net long position in bullion by 44,058 lots to 49,835 lots, the lowest since early January. During that week, prices dropped about 1.5 percent on firm expectations that the Federal Reserve would hike U.S. interest rates in March and as the dollar strenthened.

* Gold premiums rose in China this week as traders said supply of the precious metal was limited due to tightening import restrictions to stem currency outflows.

* Russia produced 14.69 tonnes of gold in January, up from 14.05 tonnes in the same period last year, the finance ministry said on Friday.

* ANZ is scaling back its commodities market exposure by quitting trading activity in base metals, coal and iron ore and electricity, the bank confirmed.

* Financial leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise.

* U.S. factory output increased for a sixth straight month in February while consumer sentiment rebounded in early March, underscoring the economy's resilience even as growth appears to have slowed significantly in the first quarter.

(Reporting By Nallur Sethuraman in Bengaluru; Editing by Richard Pullin)