Gold bounced back on Monday, inching closer to last week’s 13-month high as the dollar remained under pressure ahead of the U.S. Federal Reserve’s policy meeting.

Spot gold rose 0.4 percent to $1,252.50 an ounce by 0009 GMT while U.S. gold eased 0.5 percent to $1,253.40 an ounce.

The main focus is the U.S. Federal Reserve’s policy meeting on March 15-16. The Fed lifted rates for the first time in nearly a decade in December.

After rolling out bold measures to boost the euro zone economies, including increased asset buying and a deeper cut to deposit rates, ECB President Mario Draghi on Thursday signalled there would be no further rate cuts.

The relatively weak dollar and a repricing of expectations for U.S. interest rate rises have helped gold rebound by more than 18 percent this year so far. Bullion regained its role as a shelter for risk-averse investors, in the face of tumbling equities and fears of a global economic slowdown.

Hedge funds and money managers increased their bullish position in COMEX gold to the highest in 13 months in the week to March 8, U.S. Commodity Futures Trading Commission data showed on Friday, as safe-haven buying lifted prices to the highest since February 2015.

Physical gold demand slowed in top consumer China last week, while a strike by jewellers protesting against the imposition of a tax curbed demand in No. 2 market India.

Source: Reuters