* Silver heads for fifth straight monthly gain * World stocks on track for fifth straight monthly gain * Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser (Updates prices) By K. Sathya Narayanan Aug 31 (Reuters) - Gold prices rose on Monday as the U.S. dollar fell to a two-year low on a dovish policy shift by the U.S. Federal Reserve, although the metal was set for its first monthly decline in five. Spot gold gained 0.2% to $1,967.68 per ounce by 02:09 p.m. EDT (1809 GMT), after hitting its highest since Aug. 19 at $1,976.14. For the month, the metal was down 0.3%, having surged to an all-time peak of $2,072.49 on Aug. 7. U.S. gold futures settled up 0.2% at 1,978.60. "The weaker dollar and the anticipation that we are going to get further dollar weakness has led to some small increases (in gold)" said Jeffrey Sica, founder of Circle Squared Alternative Investments. The dollar fell to an over two-year low, pressured by the Fed's latest average inflation target policy, which will allows rates to stay low even if inflation rises a bit in the future. Low interest rates tend to support gold, which is a hedge against inflation and currency depreciation. "At present there is less risk aversion in the global marketplace, which is somewhat constraining the safe-haven metal's bulls," Kitco Metals senior analyst Jim Wyckoff said in a note. A gauge of global stocks was on track for a fifth straight month of gains. "There is a significant concern that the (equities) market might have gotten extended and there might be some profit taking coming, which may lead to a rotation back to gold," Sica said. Gold has gained about 29% this year, supported by economic uncertainty stemming from the pandemic as well as the upcoming U.S. elections. Elsewhere, silver jumped 2.7% to $28.23 an ounce, on track for a fifth monthly gain. Platinum eased 0.3% to $928.36, while palladium rose 1.7% to $2,243.17. Both were set for their second straight monthly gain. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by David Gregorio and Steve Orlofsky)
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