Gold prices slipped on Monday as the dollar stood tall against its peers ahead of key central bank meetings and US inflation and payrolls data this week. Spot gold was down about 0.3 percent at $1,219.70 an ounce at 0656 GMT. US gold futures were 0.3 percent lower at $1,219 an ounce.
"The dollar-CNH is putting pressure on gold. We've got a lot of central bank meetings this week but I think the big one for us is probably the Federal Open Market Committee (FOMC). The Bank of Japan is probably going to move the dollar/yen a bit tomorrow," a Hong Kong-based trader said. The Bank of Japan holds a monetary policy meeting on Monday and Tuesday, while the US Federal Reserve meets on Tuesday and Wednesday. The Fed is likely to reaffirm its outlook for gradual rate increases in the United States.
Higher US rates tend to boost the dollar and bond yields, making greenback-denominated gold more expensive for other holders and denting bullion's non yielding appeal.
Investors are also focusing on the Bank of Japan meeting for signs of a potential shift in policy.
The Bank of England is due to announce a policy decision on Thursday.
"Technically I think the trend is still down but post-FOMC I'm always a bit anxious of being short because generally we see a bit of bounce after FOMC," the trader said.
Spot gold still targets a range of $1,206-$1,214 per ounce, as its bounce from the July 19 low of $1,211.08 has completed, according to Reuters technicals analyst Wang Tao.
Hedge funds and money managers increased their net short position in COMEX gold contracts to a record in the week to July 24, US Commodity Futures Trading Commission (CFTC) data showed on Friday. Investors added 5,001 contracts to their net short position, bringing it to 27,156 contracts, the biggest on record dating back to 2006, CFTC data showed.
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