Gold prices edged higher on Monday as investors priced in a pause in interest rate hikes by the Federal Reserve at its policy meeting this week, with a focus on the U.S. central bank's rate outlook.
Spot gold gained 0.3% to $1,928.69 per ounce by 0533 GMT. U.S. gold futures were up 0.2% at $1,949.70.
Asian shares fell, making gold more attractive for investors ahead of policy decisions by the Fed on Wednesday, the Bank of England on Thursday and the Bank of Japan due on Friday.
"It will be pivotal to watch the latest 'dot-plot' projections on whether Fed officials will take on a similar stagflationary forecasting stance as the ECB, after a significant rise in oil prices," said Kelvin Wong, senior market analyst, Asia Pacific, at OANDA.
Faster growth, cooler inflation and a job market that won't quit have set the stage for an updated batch of forecasts from Fed officials this week, which is likely to reflect their growing faith in prospects for an economic soft landing.
However, they will likely keep one more rate hike on the table.
Gold, which offers no yield, tends to fall out of favour among investors when interest rates rise.
COMEX gold speculators cut net long position by 16,544 contracts in week ended Sept. 12, data showed on Friday.
"Indeed, the growing soft-landing and higher-for-longer rates narrative sapped investor appetite for the yellow metal," TD Securities wrote in a weekend note.
"The upbeat CPI and retail sales data only further emboldened this narrative, suggesting the bulls will need to be patient for another upside catalyst."
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.
Spot silver climbed 0.8% to $23.19 per ounce, platinum gained 0.5% to $929.54 and palladium rose 0.4% to $1,253.41.
(Reporting by Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips and Varun H K)