Gold dips as stronger dollar dampens appeal

FUNDAMENTALS

* Spot gold was down 0.3% at $1,962.36 per ounce, as of 0049 GMT. U.S. gold futures also fell 0.3% to $1,980.10.

* The dollar index was 0.3% higher. [USD/]

* Oil prices surged on Monday after Saudi Arabia and other OPEC+ oil producers announced a surprise round of output cuts, a potentially ominous sign for global inflation just days after a slowdown in U.S. price data had boosted market optimism. [MKTS/GLOB]

* U.S. consumer spending rose moderately in February, and while inflation cooled, it remained high enough to possibly allow the Federal Reserve to raise interest rates one more time this year.

* The opportunity cost of holding non-yielding bullion rises when interest rates are increased to bring down inflation. * Markets see a 48.4% chance of the Fed hiking rates by a quarter point in May, according to the CME FedWatch tool.

* Fed Board Governor Lisa Cook on Friday said she is watching credit conditions closely and will factor in potential economic headwinds from recent banking sector turmoil as she weighs the right level of rates to deal with high and persistent inflation.

* Fed Bank of New York President John Williams said on Friday how financial conditions play out will be a key contributor to his thinking about what’s next for central bank interest rate policy.

* Spot silver shed 0.7% to $23.91 per ounce, platinum dropped 0.5% at $986.39, while palladium edged up 0.1% to $1,461.80.