Spot gold was up 0.1% at $1,854.21 by 10:41 a.m. EST (1541 GMT), after rising as much as 0.8%.
U.S. gold futures fell 0.2% to $1,853.50 per ounce.
The dollar was up 0.3%, making bullion more expensive for holders of other currencies. “We’re starting to get early indications that the dollar index has hit a near-term bottom. If that’s the case, a rising dollar would work against the precious market bulls,” Kitco Metals senior analyst Jim Wyckoff.
“The prospect of inflation down the road given all the stimulus and central bank easing that has made the world financial system awash in cash, that’s supportive (for gold) on a longer term basis.” U.S. President Joe Biden’s administration countered concerns about the $1.9 trillion pandemic relief proposal being too expensive and underlined the need to act swiftly.
“We’re going to see the underpinnings of support in this market, whether that support comes from a dovish Fed or ongoing stimulus measures is the main focal point for this market over the next several months,” said David Meger, director of metals trading at High Ridge Futures.
The Federal Reserve’s two-day policy meeting starts on Tuesday.
The U.S. central bank’s policy is expected to remain firmly in rescue mode, with interest rates pinned near zero. Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar.
Silver gained 0.1% to $25.42 an ounce, platinum fell 0.2% to $1,096.06 and palladium was down 0.9% at $2,332.10.
