Gold edged up for a third session on Monday before the meeting of Europes finance ministers in Brussels who are set to discuss the financial future of Greece.
Comex gold for delivery in April was up 0.38% at $1 231.8 per troy ounce at 07:56 GMT, shifting in a daily range of $1 233.6 – $1 227.0. The precious metal edged up 0.52% on Friday to $1 227.1.
Greeces Finance Minister Yanis Varoufakis will resume talks with his European counterparts, following failed negotiations last week, later on Monday.
Officials are to reach an agreement on the funding of Europes most indebted country as its current bailout deal expires in the end of the month, after Europe agreed in December to extend the deal by two more months.
Greece is asking for a six-month bridge agreement in order to buy more time to reach a new bailout deal. The new government, which was elected on a promise to substantially reduce Greeces debt and lift austerity measures, proposed earlier this month to swap its current debt with new growth-linked bonds.
However, creditors are insisting that the administration, led by Prime Minister Alexis Tsipras, must respect the terms of the deal inked by Greeces previous government.
Gold benefits from political instability as investors seek shelter amid the possibility of Greece leaving the Eurozone, if an agreement is not reached.
“Concerns about Greeces negotiations with its lenders should continue to support a safe-haven bid for gold,” said Victor Thianpiriya, an analyst with ANZ, cited by CNBC.
The yellow metal was also boosted by the recent weakness in the dollar, spurred by a series of disappointing US data, the latest of which came in on Friday. Despite robust job gains during the last three months, US consumer sentiment dropped from an 11-year high.
According to the University of Michigan, the preliminary consumer sentiment index slid to 93.6 in February from 98.1 in January, defying projections to have remained unchanged. The decline might have been triggered by the recent slight increase in gasoline prices.
Overall, traders remained cautious as the prospects of an increase in interest rates by the Federal Reserve weigh in favor of selling the yellow metal.
US officials are set to raise borrowing costs, which have been kept near zero levels since 2008, by June this year. However, policy makers are concerned with the plunge of oil prices, which has helped keep inflation in the US below Feds target of 2%.
The US dollar index for settlement in March was down 0.24% at 94.050 at 07:59 GMT, holding in a daily range of 94.245-93.970. The US currency gauge gained 0.09% on Friday to 94.279. A weaker greenback makes dollar-denominated commodities cheaper for holders of foreign currencies and boosts their appeal as an alternative investment.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETF, fell 3.25 tons on Friday to 768.26 tons. Changes in holdings typically move gold prices in the same direction.
Additionally, money managers reduced their net long positions in gold futures and options for a second consecutive week in the week ended February 10.
Pivot Points
According to Binary Tribune’s daily analysis, April gold’s central pivot point on the Comex stands at $1 228.2. If the contract breaks its first resistance level at $1 233.8, next barrier will be at $1 240.6. In case the second key resistance is broken, the precious metal may attempt to advance to $1 246.2.
If the contract manages to breach the S1 level at $1 221.4, it will next see support at $1 215.8. With this second key support broken, movement to the downside may extend to $1 209.0.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
