Investing.com - Gold held on to small gains on Monday, after data showed that the New York Federal Reserve’s index of manufacturing conditions improved at a weaker rate than expected in March, adding to concerns over the strength of the economy.
The Federal Reserve Bank of New York said that its general business conditions index decreased to 6.9 this month from a reading of 7.8 in February. Analysts had expected the index to inch up to 8.0 in March.
On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 80 cents, or 0.07%, to trade at $1,153.20 a troy ounce during U.S. morning hours. Prices held in a range between $1,152.80 and $1,163.20.
Futures were likely to find support at $1,146.50, the low from March 11, and resistance at $1,169.60, the high from March 10.
Meanwhile, the U.S. dollar took a breather from its recent rally ahead of the Federal Reserve's two-day monetary policy meeting beginning on Tuesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.4% to 100.31, after hitting an intraday peak of 100.71, a level last reached in April 2003.
Gold prices often move inversely to the U.S. dollar, as the precious metal becomes less expensive for buyers using other currencies.
Market participants were looking ahead to Wednesday’s Federal Reserve statement to see if it would drop its reference to being "patient" before raising rates.
Traders would interpret such a move as a sign that the central bank could raise rates as early as its June monetary policy meeting.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Meanwhile, silver futures for May delivery climbed 8.4 cents, or 0.54%, to trade at $15.57 a troy ounce.
Elsewhere on the Comex, copper for May delivery dipped 0.5 cents, or 0.19%, to trade at $2.659 a pound as prices remained supported by expectations for further monetary easing in China.
Chinese Premier Li Keqiang said on Sunday that policymakers are prepared to take action to stimulate the economy if needed and that the country has plenty of scope to adjust policies in order to boost growth and fight off deflation.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.