Gold futures reach two-week high, amid modest gains from the euro

New York (Mar 23)  Gold futures edged up on Monday reaching two-week highs, amid modest gains from the euro against the U.S. dollar.

On the Comex division of the New York Mercantile Exchange gold futures for April delivery rose 3.10 or 0.26% to $1,187.70 a troy ounce. At one point on Monday, gold moved to $1,188.80 – its highest level since Mar. 6. Gold futures traded at a daily low of $1,178.60 in U.S. morning trading.

Gold futures likely earned support at 1,148.20 the low from March 17 and resistance at 1,196.20 the high from March 5.

Gold prices have rallied since the middle of last week following relatively dovish comments from Federal Reserve chair Janet Yellen halted the dollar's steep appreciation against the euro. Despite offering indications that the Fed will likely increase interest rates at some point this year, Yellen said the Fed will take a "data-driven" approach on the timing of its first interest rate hike since 2009.

In addition, lower forecasts from the Fed on inflation and GDP growth, sent the dollar spiraling to its worst week versus the euro in two years. On Mar. 5, EUR/USD fell to 1.0987, marking the first time it slipped below 1.10 in 12 years, as expectations of an imminent rate hike coincided with the start of a €60 billion a month bond buying program. The pair continued its steep depreciation to 1.05 levels on Mar. 13, before reversing amid Yellen's comments.

On Monday, EUR/USD moved above the early-March levels at 1.909 before falling back slightly to 1.094 in U.S. afternoon trading. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell 0.76% to 97.30. Dollar-denominated commodities such as gold become less expensive for foreign purchasers in periods of a weaker dollar.

In India, 24k gold futures on the Multi Commodity Exchange fell slightly to Rs 26,133 per 10 grams from Friday's level of 26,315. India is the largest purchaser of the precious metal.

Elsewhere, silver futures for May delivery edged up 0.007 or 0.04% to 16.89 a troy ounce.

Copper delivery for the month of May also rose 1.3% or 0.036 to 2.797 a pound.