Gold inched higher on Monday as elevated US inflation lifted the appeal of the metal, while investors awaited a Federal Reserve meeting to learn how quickly it plans to finish unwinding its bond-buying programme.
Spot gold rose 0.2% to $1,786.02 per ounce by 0438 GMT after rising as much as 0.8% on Friday. US gold futures were also up 0.2% to $1,787.30.
With the market pricing in the Fed moving forward into a rate hike cycle, it is sufficient for gold to be counted as a defensive asset right now, said Stephen Innes, managing partner at SPI Asset Management. "And that's why it's continuing to hold the bid."
"The dot plot this week is really going to be the driving force. Three dot plots - gold goes down below $1,770. The dollar weakens on two dot plots and gold moves to the top side range of $1,810."
The Fed is likely to announce a faster tapering of bond purchases, but more pronounced concerns over inflation or an aggressive "dot plot" could roil markets.
US consumer prices increased further in November as the cost of goods and services rose broadly amid supply constraints, leading to the largest annual gain since 1982. Gold is seen as an inflation hedge.
The dollar index held steady as six of the G10 central banks and a number of emerging-market central banks are set to review their monetary policies.
The European Central Bank is set to halve the amount of assets it buys each month from April, according to a Reuters poll.
Spot gold is poised to break a resistance at $1,789 per ounce, and rise towards the next resistance at $1,805, according to Reuters technical analyst Wang Tao.
Spot silver rose 0.4% to $22.25 an ounce, platinum jumped 1.1% to $952.15 and palladium gained 0.7% to $1,773.17.