Gold edged higher on Monday ahead of the U.S. Federal Reserve's policy decision this week, where it is overwhelmingly expected to keep interest rates steady, but investors will be watching the central bank's language on future rates.
Spot gold gained 0.1% to $1,925.50 per ounce by 1223 GMT. U.S. gold futures were up 0.1% at $1,948. Investors over the week would be looking at policy decisions by the Fed on Wednesday, the Bank of England on Thursday and the Bank of Japan due on Friday.
"So far, due to the resilience of the U.S. economy and high levels of inflation, investors are not yet sure that we've reached the interest rate peak," said Carlo Alberto De Casa, market analyst at Kinesis Money.
"There are good chances that rates are going to remain elevated for long time and this is negative for gold," he said, adding that only a clear surpass of $1,950-1,952 levels can give fresh fuel to gold prices.
Non-yielding gold tends to fall out of favour among investors when interest rates rise.
Traders have priced in a 99% chance of the Fed leaving rates unchanged on Wednesday, but there's around 31% probability of a rate rise in November, according to the CME's FedWatch Tool.
"Gold has seen limited investor appeal this year as the market consensus shifts to soft landing expectations," analysts at investment bank SP Angel wrote in a note.
Chinese gold prices hit record highs last week, extending a months-long rally as consumers snap up the safe-haven asset to offset a depreciating yuan. Physical gold premiums also soared to new highs.
"While the developments in China are worth watching, we currently do not believe that this will change the outlook for the gold market," said Julius Baer analyst Carsten Menke.
Spot silver rose 0.4% to $23.09 per ounce, platinum gained 0.7% to $931.44 and palladium eased 0.6% to $1,240.70.
(Reporting by Swati Verma and Anushree Mukherjee in Bengaluru, Editing by Louise Heavens and Krishna Chandra Eluri)