Investing.com - Gold prices held on to overnight gains during North America's session on Monday, as the U.S. dollar slipped amid expectations of no rate change from the Federal Reserve this week.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $8.10, or 0.62%, to trade at $1,318.30 a troy ounce by 8:30AM ET (12:30GMT). On Friday, prices slumped to $1,309.20, the lowest since September 1.
The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET (18:00GMT) on Wednesday. Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes.
The central bank will also release its latest forecasts for economic growth and interest rates.
Markets are currently pricing in just a 15% chance of a rate hike this week, according to Investing.com's Fed Rate Monitor Tool. For December, odds stood at around 54%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
The U.S. dollar index, which measures the greenback's value against a basket of six major currencies, fell 0.3% to 95.80 early Monday. On Friday, it touched 96.11, its strongest level since September 1.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The market is also waiting for the outcome of a Bank of Japan policy meeting, which also meets on September 20-21, for trading cues.
Elsewhere on the Comex, silver futures for December delivery jumped 44.1 cents, or 2.34%, to trade at $19.30 a troy ounce during morning hours in New York, while copper futures eased down 0.4 cents, or 0.2%, to $2.156 a pound.