Investing.com - Gold prices rose to a two-week high on Monday, as the U.S. dollar declined amid expectations U.S. interest rates will rise at a slower pace than previously thought.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery touched a session high of $1,188.20 a troy ounce, the most since March 6, before trading at $1,185.10 during U.S. morning hours, up 50 cents, or 0.04%.
On Friday, gold rallied $15.60, or 1.33%, to settle at $1,184.60. Futures were likely to find support at $1,144.90, the low from March 18, and resistance at $1,200.00, the high from March 6.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.7% to 97.36 on Monday. The index ended last week down 2.53%, the biggest weekly loss since October 2011.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The dollar's losses came after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections last week, prompting investors to push back expectations on the timing and pace of future rate increases.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Gold fell to a four-month low of $1,141.60 on March 17 amid concerns that the Fed will start raising rates as early as in June.
The National Association of Realtors earlier reported that U.S. existing home sales increased 1.2% to 4.88 million units last month from 4.82 million in January. Analysts had expected existing home sales to rise 1.7% to 4.90 million units in February.
Investors were now looking ahead to Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down inflation.
Meanwhile, silver futures for May delivery declined 4.0 cents, or 0.24%, to trade at $16.84 a troy ounce. The May silver contract soared $1.25, or 8.96%, last week, the first weekly gain in three weeks.
Elsewhere on the Comex, copper for May delivery advanced 2.4 cents, or 0.87%, to trade at $2.785 a pound.
Prices hit an intraday peak of $2.799 a pound, the most since January 5, amid speculation demand for the industrial metal will increase as a result of accommodative central bank policies in the U.S., Europe and China.