Spot gold rose 0.94 percent at $1,255.30 an ounce, after hitting a one-month high of $1,261.03 earlier. U.S. gold futures for April delivery were up $7.20 to settle at $1,255.70.
"This is entirely driven by the weaker U.S. dollar," Commerzbank analyst Carsten Fritsch said. "The euro is at the highest level versus the greenback since immediately after the U.S. election. The Trumpflation trade is being priced out after the failure to repeal Obamacare."
Gold had already rallied sharply from its March 15 low following a less hawkish policy statement than expected from the Federal Reserve, which dampened expectations for near-term increases in U.S. interest rates.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
The metal ran into resistance in earlier trade at its 200-day moving average, now at $1,259 an ounce. The 200-day average also halted last month's sharp price rally. A close above that threshold could trigger follow-through buying, analysts said.
"While the bull camp is back in control of the gold market, it may be difficult to re-test the 2017 high above $1,261 unless risk-aversion continues to grow," futures analysis and forecasting specialist Hightower said in a report on Monday.