Gold futures rose on Monday after Moody's Investors Service said risks are growing for the ratings of the four largest AAA-rated economies – the United States, the United Kingdom, Germany and France – leading investors to seek shelter in gold.

"Sovereign-debt issues and currency risk remain prevalent and look set to keep gold buoyant for the foreseeable future," analysts at GoldCore wrote in a note. "Indeed, gold is increasingly being seen as a safe-haven currency."
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Gold for April delivery gained $3.70, or 0.3%, to end at $1,105.40 an ounce at the New York Mercantile Exchange.

The yellow metal fell 2.4% last week.

The Moody's report, meanwhile, helped offset the impact of a stronger dollar, which typically reduces gold's appeal as an alternative to the currency.

The dollar, which has served as a safe haven since the credit crisis began, also rallied on the back of the Moody's report.

In addition, the U.S. currency is getting a lift ahead of the Federal Reserve's monetary-policy meeting, which starts Tuesday. Speculation has mounted that the central bank might remove its pledge to keep interest rates at historically low levels "for an extended period of time."

At the last Fed meeting, Kansas City Fed president Thomas Hoenig dissented from the majority view against keeping that pledge in the central bank's statement.

"All that is needed for the dollar to resume its four-month rally is for [...] Hoenig to maintain his dissent" and for the Fed "to upgrade its economic view," according to Ashraf Laidi, currency strategist at CMC Markets.

As a result, "we can expect a lower trajectory for both gold and oil," Laidi wrote in emailed comments.

The dollar index, which measures the U.S. unit against a basket of six major currencies, rose to 80.28, up 0.4%.

The U.S. currency added to gains after the New York Federal Reserve Bank's Empire State Manufacturing Index slipped to 22.9 in March from 24.9 in February.

It also held onto gains after news that U.S. industrial production rose 0.1% last month, against expectations for a 0.2% decline.

Separately, concerns that China might further tighten access to money to cool its growth hit shares in Asia and some industrial metals.

Copper for May delivery fell 7 cents, or 2%, to end at $3.31 a pound.

Among other metals, silver for April fell 6.2 cents to $17.10 an ounce. Palladium for April fell $2.50, or 0.6%, to $460.65 an ounce. Platinum for the same month rose $7.40, or 0.5%, to $1,615.80 an ounce.