* U.S. Q4 GDP grows 2.6 percent, better than expected
* Gold down about 0.5 pct for the month
* Palladium hovers near record peak hit earlier this week
* Platinum sees biggest monthly pct gain since Jan. 2018
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
By Arijit Bose and Swati Verma
Feb 28 (Reuters) - Gold retreated to a two-week low on Thursday as the dollar recouped losses on stronger-than-expected U.S. economic data, setting bullion on course for its first monthly decline in the last five.
As of 1:49 pm EST (1849 GMT), spot gold XAU= fell 0.4 percent to $1,314 per ounce, after hitting a low of $1,312.43, its weakest since Feb. 15.
U.S. gold futures GCv1 settled down 0.4 percent at $1,316.1.
"Gold is more data-driven at the moment. We had the better gross domestic product (GDP) data and that was the biggest driver for the pullback," said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
Gold was hurt by the dollar's advance following the release of the data, he added.
The dollar .DXY regained some momentum versus six major currencies after the U.S. Commerce Department's report showed a 2.6 percent annualized rate increase in gross domestic product for the fourth quarter. USD/
Economists polled by Reuters had forecast GDP to grow 2.3 percent in the fourth quarter. strong GDP data came after U.S. Federal Reserve Chairman Jerome Powell said the central bank was in no hurry to decide on future interest rates hikes. a technical point of view, a fall below $1,320 could open space for further a decline to $1,300, an area which is likely to stop the short-term bearish scenario," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Investors are monitoring tensions between India and Pakistan which have engaged in retaliatory attacks, and developments on the U.S.-China trade talks. is considered a safe asset during times of economic or political uncertainty.
Among other precious metals, spot palladium XPD= rose 0.9 percent to $1,542 per ounce, after retreating from its all-time peak of 1,565.09 scaled earlier in the week. The metal recorded its biggest monthly percentage gain since November 2016.
"Palladium is the bitcoin of metals. Any pullback is going to be a buying opportunity rather than a selling opportunity. Also there are some difficulties mining it," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.
The autocatalyst metal has surged about 22 percent so far this year amid tightening supply in the market.
Spot silver XAG= fell 1 percent to $15.58 per ounce and was down about 3 percent for the month, its weakest since August.
Platinum XPT= rose 0.3 percent to $867, after hitting its highest since Nov. 7 at $876 earlier in the session. Prices also marked their biggest monthly gain since January 2018, having risen more than 5 percent.