As the USA dollar weakened, Gold prices hit a two and a half week high to $1,235.50 per ounce up by $5.30 after the Federal Reserve's announcement to officially raise interest rates.
In remarks to broadcaster FOX Business, the president of the Federal Reserve Bank of Chicago said that if the improvement in the economy were sustained then the monetary authority would likely raise rates twice more over the rest of the year.
Gold's strong showing is partly a result of the continued decline in the Buck, which touched a 5-week low after the Fed raised interest rates last week for the 3rd time since June 2006.
Sterling rebounded to US$1.2360 after it weakened on news that the British government will officially begin the process to leave the European Union on March 29.
"It's follow-through and a hangover from last week - the concept of a dovish Fed", said Brad Bechtel, managing director at Jefferies in NY.
"Gold is testing higher ground due to dovish tone from Fed on interest rate increase for the rest of the year, coupled with short-term covering speculations".
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Forex - Dollar holds onto modest gains, but remains near 5-week trough
Japan's Nikkei 225 fell 0.3 percent, South Korea's Kospi rose 0.7 percent and the Hang Seng in Hon Kong added 0.1 percent. Dutch Prime Minister Mark Rutte's party won a parliamentary election victory over anti-Islam lawmaker Geert Wilders.
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This missing part of the equation "acceleration of tightening" was enough to send the US dollar into a U-turn, and global stocks to fresh record highs. It last stood at 2.479 percent. The index is a measure of the dollar against a basket of major currencies.
With the French and German federal elections approaching, gains by populist anti-Euro parties could send investors flocking once more to gold.
"At the moment, worries about the election have subsided a bit after the Dutch elections".
The market's focus on Monday was primarily on weakness in the US dollar near the beginning of the trading session, but as of 1700 GMT, the USA dollar had regained its position and was positive, at which point the focus became potential geopolitical instability triggered by Brexit.
The Canadian dollar settled at $1.3354 to the greenback, or 74.88 cents United States, slightly weaker than Friday's close of $1.3337, or 74.98 cents US.
The local currency's US5?? rise against the greenback this year comes against the background of a consolidation among traders who bid up the buck aggressively in the weeks following the USA election, amid talk of border taxes, immigration controls, and repatriation of the billions of dollars held by American companies offshore. "But the currency has strengthened since the Fed tightened policy and is edging further away from where we think the RBA views the sweet spot" in the low 70s. Oil prices fell as investors continue to grapple with worries about growing USA oil output and high inventories.