Investing.com - Gold prices traded slightly higher on Monday, as political jitters from Europe supported demand for the yellow-metal while the possibility of a U.S. rate hike later this week capped further gains.
Gold for April delivery on the Comex division of the New York Mercantile Exchange gained $2.15 or 0.18%, to trade at $1,203.55 a troy ounce, after closing above the important psychological trading level of $1200 in the previous session.
Gold held firm in early morning trade on Monday, after investors braced for a fresh round of political uncertainty from Europe ahead of the Dutch parliamentary election on Wednesday. Although the risk of a Eurosceptic party emerging as victorious is slim, the Dutch election represents a high volatile scenario as it comes ahead of the French elections.
“[…] the timing of the Dutch elections, just ahead of the French elections, could make them market sensitive after all, if only as a bellwether for coming elections across Europe and in France in particular.” Barclays Research said in a note to clients.
Upside momentum in the yellow-metal remained capped as political uncertainty continued to play second fiddle to expectations that the Federal Reserve will hike interest rates on Wednesday following the conclusion of its two-day meeting on March 14-15.
According to Investing.com’s Fed rate monitor tool, 93% of traders expect a rate hike in March.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Elsewhere, silver futures gained 0.35% to trade at $16.983 a troy ounce while copper traded higher at $2.625.
Platinum traded at $941.20 up 0.33% while Natural Gas gained 1.40% to trade at $3.05.