Gold rose on Monday, consolidating near the $1,950 mark after plunging 4.5% last week, buoyed by a weaker dollar as investors await the fine print on the U.S. Federal Reserve's strategy to stem the economic toll of the coronavirus.

Spot gold rose 0.3% to $1,950.16 an ounce by 0946 GMT and U.S. gold futures gained 0.5% to $1,959.10.

Gold last week registered its biggest decline since March as investors reassessed positions after bullion retreated from a record peak of $2,072.50 scaled on Aug. 7.

"We're seeing a consolidation phase after last week's sell-off," said ActivTrades chief analyst Carlo Alberto De Casa, adding that "interest for gold remains elevated".

The market is trying to find a new equilibrium, but signs of further dovish central bank policy and a move above $1,960 could provide space for further rallies, he said.

Coronavirus cases, meanwhile, continued to surge globally, especially in the United States and India, casting a shadow over hopes of an economic recovery. 

Also making gold cheaper for those holding other currencies, the dollar remained on the defensive, having hit a more than one-week low earlier in the day. 

The minutes from the Fed's last policy meeting are due on Wednesday, with markets looking for any hints of a possible change to its guidance at its next review in September.

"If there is something strong (from the Fed), more than what's already priced in", gold could rise again to $2,000, said ActivTrades' Carlo. Unprecedented global stimulus measures in response to the COVID-19 pandemic, which have fuelled fears of inflation and currency debasement, have helped gold prices to climb more than 28% this year.

While the outlook remains constructive for gold, there are indications the recent correction could have room to run in the short-term, said IG Markets analyst Kyle Rodda.

In other precious metals, silver rose 1.4% to $26.77 an ounce, platinum gained 2.1% to $955.54 and palladium XPD= was up by 3.1% at $2,173.37.

(Reporting by Nakul Iyer and Harshith Aranya in Bengaluru Editing by David Goodman) ((nakul.iyer@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 0417; Reuters Messaging: nakul.iyer.thomsonreuters.com@reuters.net))