Gold edged down on Monday to just above a one-month low, as the dollar recovered and global stocks rose ahead of a Federal Reserve policy meeting that will be scrutinised for clarity on when the US central bank will raise interest rates. Spot gold fell 0.2 percent to $1,105.05 an ounce by 1337 GMT. It had fallen to $1,098.35 on Friday, the lowest since August 11.
US gold for December delivery was up 0.2 percent at $1,104.90, but also close to its lowest in a month. The Fed will kick off a two-day policy meeting on Wednesday. Though some in the market still reckon a "lift-off" could come this week, the view is gathering steam that faltering global growth could push that back even into next year.
"There has been so much anticipation (about the Fed rate hike) that we are now anticipated out," Macquarie analyst Matthew Turner said. "I don't think that not raising rates in September could feel like a complete change of policy," Turner said, adding that one concern for gold could be if the dollar resumes its upward move against developed market currencies.
The dollar recovered from an almost three-week low against a basket of major currencies, while European shares rose, showing resilience to weak China data published over the weekend. Gold has benefited in recent years from ultra-low rates, which cut the opportunity cost of holding non-yielding gold while weighing on the dollar, in which the metal is priced.
Concerns over slowing economic growth in China, mixed economic data and volatility in financial markets have increased doubts about the timing of any US rate increase, which had been expected as early as this month. A small majority of forecasters are sticking to their guns and predicting the Fed will pull the trigger this week. "A non rate hike in September could give a temporary respite to gold, but prices are unlikely to breach recent highs around $1,170," ActivTrades chief analyst Carlo Alberto de Casa said.
Investor positioning has not been encouraging for gold prices. Hedge funds and money managers cut their bullish stance in COMEX gold contracts to a three-week low in the week ended September 8, while boosting their short positions, US Commodity Futures Trading Commission data showed on Friday. Other precious metals were also under pressure, with silver down 1.4 percent at $14.39 an ounce and platinum falling 1.5 percent to $951.50. Palladium fell 1.6 percent to $582.75.