Investing.com - Gold prices bounced back from nearly a 2-week low on Monday as the U.S. dollar dipped and traders turned their attention to this week’s Federal Reserve monetary policy meeting.
At 10:30 AM ET (15:30 GMT), gold futures for February delivery on the Comex division of the New York Mercantile Exchange gained $4.30, or 0.35%, to $1,245.70 a troy ounce, after dropping to $1,236.50 on Friday, its lowest level since Dec. 4.
The precious metal hit Friday’s low as positive readings on American consumer spending and industrial production released Friday drove the U.S. dollar to an 18-month high.
Gold is often sensitive to movements in the dollar. A stronger greenback is seen as a headwind for commodities priced in dollars as it makes them more expensive to holders of other currencies.
“The key driver (of prices) in the next few sessions is going to be the markets' expectations for the Fed," said Suki Cooper, precious metals analyst at Standard Chartered.
The Fed is widely anticipated to increase interest rates by a quarter-point on Thursday, in what will be its eighth move since December 2015 when it embarked upon policy normalization.
Investors will pay close attention to updated economic projections, particularly the dot plot that lays out expectations for rates and the post-policy meeting press conference by Fed Chairman Jerome Powell. Concerns about the outlook for global growth along with trade tensions and market volatility have prompted traders to push back expectations on the expected pace of Fed rate hikes in 2019.
"Any content that speaks to the difference between market pricing of one interest rate rise in 2019 versus previous Fed indications of three rises is very likely to move markets," Michael McCarthy, Sydney-based chief markets strategist at CMC Markets, said in a note.
In other metals trading, silver futures edged forward 0.09% at $14.650 a troy ounce 10:33 AM ET (15:33 GMT).
Palladium futures gained 1.31% to $1,186.90 an ounce, while sister metal platinum inched up 0.01% at $785.40.
In base metals, copper traded down 1.18% to $2.730 a pound.
-- Reuters contributed to this report.