Spot gold rose 0.3% at $1,781.97 per ounce, while U.S. gold futures added 0.2% to $$1,781.90 per ounce

Prices of gold rose on Monday as increasing Covid cases bolstered the yellow metal’s safe-haven appeal, supported by a weaker dollar as investors await this week’s U.S. Federal Reserve meeting, while auto-catalyst palladium was little changed after scaling historic highs last week.

Spot gold rose 0.3% at $1,781.97 per ounce by 0343 GMT. U.S. gold futures added 0.2% to $$1,781.90 per ounce.

The COVID-19 situation in India and Japan is deteriorating. So that is boiling demand for safety, resulting in higher gold prices, said Margaret Yang, a strategist at DailyFX, adding that an easing dollar is further supporting prices.

Coronavirus cases hit a record high, while Japan declared states of emergency for Tokyo, Osaka and two other prefectures on Friday amid soaring coronavirus cases.

Speculators raised their bullish positions in COMEX gold in the week to April 20, the U.S. Commodity Futures Trading Commission said on Friday.

On the other hand, investors are looking at very strong U.S. economic data released on Friday, said Yang, adding higher yields are capping gold’s gains.

U.S. factory activity powered ahead in early April, while retail sales climbed to a record high in March and hiring accelerated.

Market participants now await Fed’s two-day policy meeting starting on Tuesday. Although no change in policy is expected, the focus will be on Chair Jerome Powell’s press conference.

In other metals, palladium gained 0.1% at $2,858.76 per ounce, after scaling a record peak of $2,925.14 on Friday.

Strong industrial demand from the auto sector and investor interest saw palladium trade to a fresh record high underpinned by Nornickel’s lacklustre output numbers and continued strong demand from tightening emissions standards, said independent analyst Robin Bhar in a note.

Palladium has been in deficit for several years and this is set to continue over coming years, the analyst said.

Silver added 0.2% to $26.04 per ounce. Platinum rose 0.4% at $1,234.42.