Gold prices on Monday, March 20 hit a two-week high as the dollar held near five-week lows reached in the previous session.
Spot gold rose 0.4 percent to $1,233.60 per ounce by 0310 GMT, after earlier touching $1,234.60 an ounce, its highest since March 6. US gold futures gained 0.3 percent to $1,233.90.
Spot gold is expected to test a resistance at $1,237 per ounce, a break above which could lead to a gain to $1,243, according to Reuters technical analyst Wang Tao.
The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 100.160, holding near Friday’s lows.
Markets are also bracing for a packed week of Fed messaging with no less than nine different policy makers set to speak, including Chair Janet Yellen on Thursday.
Yellen’s cautious guidance last week has investors pricing in almost no chance of another rate rise at the next policy meeting in May, rising to around 50-50 for June.
Hedge funds and money managers had slashed net long positions in COMEX gold for the second straight week in the week to March 14.
Money managers cut their net long position in bullion by 44,058 lots to 49,835 lots, the lowest since early January.
During that week, prices dropped about 1.5 percent on firm expectations that the Federal Reserve would hike US interest rates in March and as the dollar strengthened.
Holdings of SPDR Gold, the world’s largest gold-backed exchange-traded fund, fell 0.35 percent to 834.10 tonnes on Friday. Spot silver rose 0.4 percent on to $17.39 per ounce on Monday.
Platinum was up 0.5 percent to $962.50, while palladium rose 0.4 percent to $775.50, Khaleej Times reports.