SINGAPORE: Gold prices rose in Asian trade on Monday supported by a weaker dollar, while investors looked forward to the US Federal Reserve policy meeting later this week for more cues on stimulus measures and inflation target.
Spot gold was up 0.2% at $1,944.69 per ounce by 0647 GMT. US gold futures rose 0.3% to $1,953.20.
"The gold market is leaning towards the Fed's (policy)," said Stephen Innes, chief market strategist at AxiCorp, adding that the US central bank might not change the current narrative, but there is a strong belief in the market that it would be able to trigger inflation.
The lower interest rate environment and long-term expectations that the Fed is going to increase quantitative easing and weaken the dollar are supporting gold prices, he added.
Market participants are also waiting for the Bank of Japan and the Bank of England's policy decisions, due on Thursday.
Major central banks have rolled out unprecedented stimulus measures and kept interest rates low, driving gold to new highs because of its role as a hedge against inflation and currency debasement.
"Gold's bullish longer-term fundamentals have not changed," Jeffrey Halley, a senior market analyst at OANDA, said in a note. "Gold has well-denoted support between $1,900 and $1,920 an ounce, with trendline resistance at $1,970."
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