* Silver falls to two-month low
* Main support lies at $1,200 for gold-analyst (Recasts throughout, adds analyst quote, updates prices)
By Karthika Suresh Namboothiri
Nov 12 (Reuters) – Gold slid to its lowest level in a month on Monday as the dollar rose to 16-month highs, boosted by the U.S. Federal Reserve’s hawkish interest rate policy and political uncertainty in Europe.
Spot gold fell 0.4 percent to $1,203.93 per ounce at 1029 EST (1529 GMT), having touched a one-month low of $1,202.91 earlier in the session.
U.S. gold futures edged 0.4 percent lower to $1,203.9 per ounce.
Last week, the metal posted its biggest weekly decline since August after the Fed reaffirmed its monetary tightening stance, seen as a negative for non-yielding bullion.
“Of the hawkish message we got from the Fed last week, we are now seeing the aftermath,” said Bart Melek, head of commodity strategies at TD Securities.
“We are now right below the 50-day (moving average) at $1,210. Trading range right now is $1,180 to $1,240 and we are going to need a catalyst to get us moving higher up.”
The Fed last week indicated it planned to raise rates next month and remained on track for two more potential hikes by mid-2019 on the back of an upbeat economy and rising wage pressures, lifting the dollar.
The dollar index, which measures the greenback against a basket of six major currencies, rose to its highest level since June 2017, denting gold’s appeal by making it more expensive for holders of other currencies to buy the metal.
In Britain, doubts that the government will be able to secure a Brexit agreement and Rome facing a Tuesday deadline to submit a revised budget to the European Union, also supported the dollar.
“The main driver (for gold) has been some renewed dollar strengthening … due to political uncertainty in UK and Italy,” said Saxo Bank analyst Ole Hansen, adding that $1,200 is “both the psychological and technical level of support” for the metal.
Silver slipped 0.7 percent to $14.058 per ounce, touching its lowest since Sept. 11.
Palladium dipped 0.3 percent to $1,113.3 per ounce, while platinum rose 0.4 percent at $852.60 an ounce. (Reporting by Karthika Suresh Namboothiri and Sumita Layek in Bengaluru Editing by Susan Thomas)