Gold slips on firmer dollar, spotlight on Fed meeting

Gold prices eased on Monday as the U.S. dollar held firm, with cautious traders awaiting the Federal Reserve's interest rate hike decision later this week. Spot gold fell 0.5% to $1,980.78 per ounce by 0759 GMT. U.S. gold futures shed 0.5% to $1,989.20. The dollar index rose 0.2%, making greenback-priced bullion more expensive for overseas buyers.

The Federal Open Market Committee (FOMC) will meet on May 2-3, and investors are largely expecting a 25 basis-point interest rate hike. If the comes out unexpectedly hawkish, then it won't bode well for gold. However, I don't think prices will fall below the $1,930 level," said Ilya Spivak, head of global macro at Tastylive.

Data on Friday highlighted that U.S. consumer spending was unchanged in March, while underlying inflation pressures remained strong, which could see the U.S. central bank raising interest rates.