Spot gold held its ground at $1,926.65 per ounce, as of 0259 GMT. U.S. gold futures were down 0.2% at $1,925.50.
Traders are eyeing the Fed's policy meeting scheduled on Jan. 31-Feb. 1. The market broadly expects the U.S. central bank to scale back rate hikes to 25 basis points (bps) from 50 bps announced in December. [FEDWATCH]
"Gold prices are currently consolidating into a range ahead of the Fed meet. The main focus will be on the tone that Fed Chair Jerome Powell will strike in his speech," said Ilya Spivak, head of global macro at Tastylive.
Gold, being a non-yielding asset, tends to benefit when interest rates are low as it reduces the opportunity cost of holding bullion.
Data on Friday showed that U.S. consumer spending fell in December, while inflation continued to subside, which could give the Fed room to further slow the pace of its rate hikes.
With rising growth concerns in the U.S. economy, the dollar might rise, but I don't expect gold to fall much as yields will likely be lower, added Spivak. [USD/] USD/]
The European Central Bank (ECB) and the Bank of England (BoE) are also having policy meetings this week.
Market participants also kept a tab on the COVID situation in top bullion consumer China. Between Jan. 20 and Jan. 26, a week that overlapped with six days of the holiday period, China registered 6,364 COVID-linked deaths, the Center for Disease Control and Prevention said on Saturday.
In other precious metals, spot silver gained 0.4% to $23.65 per ounce, platinum rose 0.2% to $1,014.53, and palladium climbed 1.2% to $1,638.45.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Uttaresh.V and Sherry Jacob-Phillips)
By Ashitha Shivaprasad
