Spot gold was up 0.1% at $1,779.73 an ounce by 0931 GMT. U.S. gold futures rose 0.1% to $1,779.60.
“We have seen some short-term buying interest come back into the market in line with the weaker dollar and lower bond yields. But if we fail to break higher soon, then there is a risk we could run into some renewed period of profit taking,” said Saxo Bank analyst Ole Hansen.
Gold prices have not been able to move forward despite a weaker dollar and lower U.S. Treasury yields because of the metal’s failure to break above the psychological $1,800 barrier, analysts said.
The dollar slumped to an almost eight-week low against other major currencies on Monday.
Market participants are awaiting the Fed‘s two-day policy meeting starting on Tuesday, with the focus on the tapering of bond purchases.
Spot gold could retest resistance at $1,792 an ounce, having stabilised around a support at $1,772, said Reuters technical analyst Wang Tao.
Palladium rose 1.2% to $2,888.75 an ounce after a record peak of $2,925.14 on Friday.
“The (palladium) price is finding tailwind from the prospect of a renewed supply deficit,” Commerzbank analysts said in a note.
“This (higher price) is the result of robust demand from the automotive industry due to tougher emissions regulations for cars with combustion engines coupled with reduced supply.”
Silver rose 0.3% to $26.07 an ounce while platinum was up 0.5% at $1,236.