Gold steadied on Monday as traders took to the sidelines ahead of a raft of central bank meetings and policy news this week, including President Donald Trump`s expected announcement of the next Federal Reserve chair.
The U.S. central bank kicks off a two-day policy meeting on Tuesday, while the Bank of Japan and Bank of England also meet this week to discuss interest rate policy.
Gold is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding bullion. Tighter U.S. policy also boosts the dollar, in which the metal is priced.
Spot gold was at $1,272.50 an ounce at 1035 GMT, little changed from its late Friday level but well off that session`s three-week low. U.S. gold futures for December delivery were up 0.1 percent at $1,273.30 an ounce.
The metal is facing a slew of potential risks this week, Saxo Bank analyst Ole Hansen said, including the U.S. monetary policy meeting and Fed chair announcement, key jobs data on Friday and ongoing unrest over Catalonia.
"Overall you can argue that the sum of these upcoming events is gold bearish, not least considering Friday`s strong read on (U.S.) growth," he said. "Funds cut back the net long for a sixth week, but it was interesting that both longs and not least short positions were cut."
Speculators cut their bullish COMEX gold bets by 1,968 contracts to 173,043 contracts, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday, taking them to their lowest since early August.
As well as the outcome of this week`s monetary policy meetings, attention is now turning to the prospects for the next Federal Reserve chair. Fed governor Jerome Powell, considered a moderate, is being widely tipped to take over from incumbent Janet Yellen when she steps down in February.
Trump has said he has been considering both Powell and Stanford University economist John Taylor for the post and has also not ruled out renominating Yellen.
"The front end of the U.S. rates curve doesn`t seem to have priced in a Taylor Rule Fed... which means that a surprise would send yields and the dollar higher, and risk assets down," SG Forex said in a note on Monday.
"The market thinks Jerome Powell, more neutral in the market`s mind, is more likely."
Among other precious metals, silver was down 0.4 percent at $16.75 an ounce. Platinum was 0.6 percent higher at $919.80 an ounce, while palladium was up 0.1 percent at $966.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)