Mubasher: Gold prices steadied earlier on Monday, as market participants awaited a meeting by the US Federal Reserve later in the week, looking for cues for monetary easing, Reuters reported.

At 7:45 am GMT, spot gold barely changed at $1,418.90 per ounce, while US gold futures traded at $1,418.60 per ounce.

By 9:01 am GMT, spot gold stabilised at $1,418.86 per ounce, while gold futures ticked down by 0.07% to $1,431.20 per ounce.

Gold prices lost around half a percent in the prior week, dragged down by stronger dollar and economic data.

At 9:07 am GMT, the dollar index, which measures the greenback against a basket of six major currencies, inched up by 0.06% to 98.07.

“This week we have the FOMC [Federal Open Market Committee] meeting, where we are likely to see a dovish outlook [which] will lead to weakness in the dollar and will eventually trigger some upside in gold prices,” Mumbai-based Nirmal Bang Commodities research head Kunal Shah was quoted by Reuters.

The Fed is set to cut interest rates by at least 25 basis points (bps) at its two-day meeting on 30 and 31 July, while investors would search for signs of monetary easing in the pipeline.

Interest rates futures are already priced for a 25 bps rate reduction, with a slight possibility of a half-point cut.

However, senior US and Chinese officials are due to meet in Shanghai this week, the first in-person negotiations since a trade ceasefire agreed between both sides at the Group of 20 summit last month.

However, expectations are low for the bilateral talks to yield a breakthrough progress.

Should this continue to drag on the global economy, “some more easing [are expected] by central banks around the world, not only by the US,” Argonaut Securities analyst Helen Lau was quoted by the news agency, pointing that gold should consequently have some support.