Investing.com - Gold prices pulled back slightly on Monday, but held near the previous session's two-week high amid ongoing concerns over Greece’s future in the euro zone and as investors continued to digest an unexpectedly dovish Federal Reserve statement.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery dipped $2.70, or 0.23%, to trade at $1,181.90 a troy ounce during European morning hours. Prices held in a range between $1,178.70 and $1,186.60.
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.
On Friday, gold touched $1,187.40, the most since March 6, before ending at $1,184.60, up $15.60, or 1.33%, as the U.S. dollar tumbled after the Federal Reserve projected a slower pace of rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, traded at 98.11 early on Monday, up 0.05%.
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, 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.
Investors were 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, the euro was little changed against the dollar ahead of a meeting between Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Berlin later on Monday.
The meeting comes amid ongoing concerns over Greece’s future in the euro zone.
Also on Monday, European Central Bank President Mario Draghi was to appear before a European Parliament committee, with the situation in Greece likely to be high on the agenda.
Meanwhile, silver for May delivery declined 21.0 cents, or 1.24%, to trade at $16.67 a troy ounce. The May silver futures 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 1.1 cents, or 0.4%, to trade at $2.772 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.