LONDON (Mar 23): Gold firmed for the fourth straight session on Monday to its highest in more than two weeks, as the dollar extended losses and expectations rose that the Federal Reserve will hold off until at least September to raise interest rates.

Gold had dipped to a four-month low before the Fed met last week as concerns mounted over higher U.S. interest rates which could dent demand for non-interest bearing bullion.

Spot gold hit its highest since March 6 at $1,188.80 an ounce in earlier trade on Monday and was up 0.4 percent at $1,186.30 by 1528 GMT.

U.S. gold futures for April delivery were unchanged at $1,185.40 an ounce.

The dollar fell 0.8 percent against a basket of leading currencies. It came under pressure after the Fed last week downgraded its economic growth and inflation projections, signalled it is in no rush to push borrowing costs to more normal levels.

Consensus expectation for a U.S. interest rate increase has shifted, with most of Wall Street's top banks now expecting the central bank to hold off until at least September, a Reuters poll showed.

"All the gold bears are disappointed that there is not going to be a June rate hike, so now the speculation is going to focus on when the next rate hike is going to be," Citi analyst David Wilson said.

"With the oil price expected to keep falling for at least the next couple of quarters, removing any inflationary pressure, and an economy that is operating nowhere near capacity...why would you put up interest rates."

European shares fell, also on caution about whether Greece can reach agreement with creditors to secure fresh funds.

Gold is usually seen as an insurance against risk in times of financial or economic troubles when equities underperform.

Despite the gain in prices, investor sentiment has not improved drastically, traders said.

Hedge funds and money managers slashed their bullish bets in gold and silver futures and options for a sixth straight week in the week ended March 17, U.S. Commodity Futures Trading Commission data showed on Friday.

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to the lowest since late January at 744.40 tonnes on Friday.

In the physical markets, demand weakened compared with last week's levels.

In China, the second biggest consumer, premiums over the London price eased to $4-$5 an ounce, lower than Friday's levels of $6-$7.

Platinum rose 1 percent to $1,144.50 an ounce, while silver gained 0.7 percent at $16.84 an ounce and palladium was down 0.6 percent at $771.25 an ounce.