Gold moves in a positive zone as the dollar dips

Gold prices rose in European trade on Monday, resuming gains after a two-day drop off record highs, with the new gains coming as the dollar declines against major rivals. 

Investors still expect the Federal Reserve to cut interest rates starting next June, which hurts the appeal of the US currency.

Gold Prices 

Gold prices rose 0.6% to $2178 an ounce, with a session-low at $2163, after losing 0.75% on Friday, the second loss in a row on profit-taking off record highs at $2222. 

The precious metal rallied to the record high on March 21 as Fed policymakers expected 75 basis points of rate cuts this year despite recent strong US inflation data.

And following bearish policy meetings by central banks in the UK, Japan, Switzerland, and the US, gold prices rallied 0.5% last week, marking the fourth weekly profit in five weeks.

The Dollar 

The dollar index fell 0.2% on Monday off five-week highs at 104.50 against a basket of major rivals. 

The dollar has lost ground this wait in wait for more data and clues on the future of theUS interest rates this year.

US Rate Prospects 

The markets are pricing in a 75% chance of a Fed interest rate cut in June, with a total of 75 basis points of US interest rate cuts expected this year.

The SPDR

Gold holdings at the SPDR Gold Trust fell 3.17 tonnes on Friday to a total of 535.33 tonnes, away from recent February 14 highs.