Gold rebounded from near 8-month low on Monday as the low price encouraged some buying, ahead of this week’s Fed policy meeting.
Last week, gold fell for a second straight week as the strong dollar sapped demand on the metal as an alternative investment.
The US dollar remained firm the previous week amid expectations the Fed may raise interest rates sooner than predicted and due to weakness in other major currencies.
The dollar index, which tracks the green currency’s movements versus a basket of six major currencies, is currently hovering around 84.30.
Data released last week signaled that retail sales rose by the most in four months in August.
However, the main highlight this week will be the two-day policy meeting by the Fed starting on Tuesday.
Hawkish comments by the Fed will probably bolster the dollar further while the opposite is true.
Fed Chair Janet Yellen will provide comments about the timing of having the first interest rate hike in eight years as well as plans about stimulus withdrawal.
Meanwhile, gold is trading around $1235.11 after hitting a high of $123.19 and a low of $1225.42.
Crude Oil for November’s delivery fell to $91.42 a barrel on Monday, compared to the session’s opening at $92.00.