Gold steady as Fed expected to remain on hold this week
Spot gold was down 0.1% at $2,766.59 per ounce as of 1210 GMT, after falling as much as 0.7% earlier in the session. Prices had risen to near-record high levels on Friday.
U.S. gold futures fell 0.3% to $2,771.40 per ounce.
The dollar was down 0.2%, erasing earlier gains and making gold, which is priced in dollars, less expensive for other currency holders.
"The risk-off sentiment across global markets, which has dragged U.S. yields and the dollar lower, has in turned helped gold erase losses from earlier in the session," said Exinity Group chief market analyst Han Tan.
"Spot gold had also been ripe for a technical pullback, even though its latest quest for a new record high fell just short."
Historically, gold has been a reliable hedge against geopolitical uncertainty and inflation, and thrives in a low-interest-rate environment where its lack of yield becomes less of a drawback.
Fed policymakers are largely expected to keep rates steady at the end of their Jan. 28-29 meeting, according to the CME FedWatch tool. This would mark the first pause in the rate-cutting cycle that began last September.
Meanwhile, the European Central Bank is set to cut rates again by another 25 basis points on Thursday.
Elsewhere, spot silver fell 0.2% to $30.54 per ounce, after logging a 0.9% increase last week.
"The gold-to-silver price ratio pushed back up above 90 last week, some way above its average of about 85 over the last three years, suggesting silver could have potential to make further gains relative to gold," Frank Watson, market analyst at Kinesis Money, said in a note.
Palladium dipped 1.8% to $970.69 per ounce and platinum fell 0.5% to $944.48 per ounce.
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