* Dollar set for fourth consecutive monthly decline
* Gold on track for first monthly fall in five
* Silver heads for fifth straight monthly gain
* Interactive graphic tracking global spread of coronavirus:open in an external browser (Recasts, adds quotes, updates prices)By Diptendu LahiriAug 31 (Reuters) - Gold traded in a narrow $20 range onMonday as it headed for its first monthly decline in five,although a weaker dollar offset pressure from increased appetitefor risk.Spot gold edged up 0.1% to $1,966.96 per ounce by1302 GMT. Activity was subdued as a British bank holiday limitedtrade and after it touched its highest since Aug. 19 at$1,976.14 during the Asian session.The metal was still down slightly for August, about 0.2%,after a volatile month during which it hit an all-time peak of$2,072.49 before consolidating below the key technical level of$1,900 as investors reassessed their positions from the recordrun.U.S. gold futures were steady at $1,975."Potential dovish policies from the U.S. Federal Reserve andstructural problems in the U.S. economy can take the dollar evenlower and this added to the already existing uncertainties makesgold even more attractive," said UBS analyst Giovanni Staunovo.The dollar continued its retreat, making gold cheaperfor holders of other currencies. Capping gold's advance, global equities held near recordhighs as investors bet on continued central bank monetarysupport to revive the economy from a pandemic-induced slump. The Fed signalled that its primary overnight interest ratecould remain close to zero for years, which decreases theopportunity cost of holding non-yielding gold. "What the Fed does next is crucial for gold," UBS analystssaid in a note.
Real rates should ease further and lift gold, but ambiguityover the Fed's September meeting is a risk, they added.Gold has gained nearly 30% this year, with its safe-havenappeal bolstered by economic uncertainty stemming from thepandemic as well as the November U.S. elections.Silver jumped 1.7% to $27.95 an ounce, on track for afifth straight monthly gain with an advance of nearly 15%.Platinum fell 0.3% to $928.23, while palladium was little changed at to $2,206.41. (Reporting by Diptendu Lahiri in Bengaluru;Editing by David Goodman and Barbara Lewis)
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