LONDON: Gold prices steadied on Monday as a retreat in the dollar and a softer tone to stock markets after downbeat German economic data helped the metal snap three straight days of losses.
The precious metal fell 0.5 percent last week as global equities posted their biggest weekly percentage gain since July 2013, while the U.S. dollar also strengthened.
Spot gold was at $1,230.26 an ounce at 1047 GMT, little changed from $1,230.95 late on Friday, while U.S. gold futures for December delivery were down $1.30 an ounce at $1,230.50.
Gold's outlook this week will depend on a Federal Reserve policy meeting, when the U.S. central bank is widely expected to end its bond-buying stimulus programme, known as quantitative easing, analysts said.
The Fed's two-day meeting, which begins on Tuesday, will also be watched for clues on whether any slowdown in Europe or elsewhere could affect the central bank's monetary policy.
"The Fed is likely to end QE3, so the accompanying statement and Q&A will be as usual closely monitored," Societe Generale analyst Robin Bhar said. "Will the Fed bear any appreciation of what's going on in the euro zone and China in terms of a slowdown?"
"The Fed obviously has a mandate domestically on inflation and growth, but could it now delay a June hike because of what's going on outside the United States? That will be something to watch for... it will give gold some near-term direction."
European stocks erased early gains to ease 0.3 percent on Monday while futures on benchmark German government bonds turned higher after a key index of German business sentiment hit its lowest level in almost two years.
The dollar index fell 0.1 percent, while the euro edged up by a similar amount against the U.S. unit, after the European Central Bank's stress tests found smaller-than-expected capital requirements among European banks.
CHINESE IMPORTS JUMP
China's net gold imports from Hong Kong jumped to a six-month high in September as the world's biggest consumer stocked up ahead of its National Day holiday.
Net imports from Hong Kong to the mainland rose to 68.641 tonnes last month from 27.477 tonnes in August, according to data from the Hong Kong Census and Statistics Department. Total gold imports from Hong Kong hit 91.745 tonnes, also the highest since March.
Bullion traders were also closely watching investors' positions in gold funds. The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, said its holdings fell 4.5 tonnes to 745.39 tonnes on Friday, an 6-year low.
That brought the fund's total outflows last week to 15.5 tonnes, the most of any week since July last year.
Hedge funds and money managers increased their bullish futures and option bets in gold for a second straight week, as the price of the precious metal rallied in the week up to Oct. 21, the Commodity Futures Trading Commission said on Friday.
Silver was up 0.2 percent at $17.16 an ounce, while spot platinum was up 0.9 percent at $1,249.30 an ounce and spot palladium was up 0.4 percent at $778.70 an ounce.
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