Gold prices slipped to a two-month low on Tuesday and were on track for their biggest monthly decline since June 2021, pressured by a stronger dollar and prospects of more rate hikes from the U.S. Federal Reserve.

Spot gold was down 0.3% at $1,812.20 by 0918 GMT, having earlier hit its lowest since late December at $1,804.20. U.S. gold futures slipped 0.4% to $1,817.70.

Prices touched their highest since April 2022 in early February, but soon reversed course. Bullion has fallen more than 6% so far this month after strong economic data showed signs of a resilient U.S. economy, adding to worries of more rate hikes by the U.S. central bank.

Gold is having a negative month as the market is expecting interest rates to remain higher for longer, said Carlo Alberto De Casa, external analyst at Kinesis Money.

"If inflation continues to rise, then gold might fall to the $1,730-$1,740 range."

Fed Governor Philip Jefferson said on Monday that he was under "no illusion" that inflation would return quickly to the U.S. central bank's target.

Although gold is considered an inflation hedge, rising interest rates increase the opportunity cost of holding the non-yielding asset.

Gold is moving closer to a very interesting area of support between $1,780 and $1,800, but economic data may determine how firm a support zone it will be, Craig Erlam, senior market analyst at OANDA, said.

"How it reacts to this level could give a strong indication of sentiment in the markets at this time."

The dollar index was headed for a monthly rise, making greenback-priced gold less attractive for other currency holders.

Spot silver fell 0.3% to $20.56 per ounce on the day and was set for second straight monthly fall.

Platinum edged up 0.2% to $936.27 and palladium lost 0.3% to $1,426.09. Both metals were set to post a drop in prices for the month.

(Reporting by Ashitha Shivaprasad and Kavya Guduru in Bengaluru; Editing by Shounak Dasgupta)