Gold prices edged higher on Monday on the prospect of extended US fiscal stimulus and accommodative monetary policies, although bullion held close to the 1-1/2 month low hit earlier as the dollar extended gains.

Spot gold was up 0.3% to $1,832.31 per ounce at 1029 GMT, after falling to $1,809.90, its lowest since Dec. 2. US gold futures were up 0.1% to $1,832.20.

"This new (US) government will provide more economic stimulus and also the policy of the US Federal Reserve is unlikely to become more hawkish going forward," said Commerzbank analyst Eugen Weinberg.

"Therefore we are likely to see continued support for gold prices."

US President-elect Joe Biden outlined a $1.9 trillion stimulus package proposal last week to jump-start the economy and accelerate the distribution of COVID-19 vaccines.

Fed Chair Jerome Powell also said there was no reason to alter the central bank's highly accommodative stance with the US economy still far from its inflation and employment goals.

Gold is considered a hedge against inflation and currency debasement, likely to arise from large stimulus measures.

However, Commerzbank's Weinberg said a stronger dollar, economic optimism and concerns about Janet Yellen as the US Treasury secretary nominee, who might be restrictive on the fiscal stimulus side, were weighing on gold prices.

The US dollar hit a four-week peak against rival currencies, making gold expensive for holders of other currencies.

Although US inflation expectations have risen in anticipation of more US fiscal stimulus, gold has not been the sole beneficiary - bond yields have risen and weighed on gold, Phillip Futures said in a note.

US Treasury yields scaled a 10-month high last week.

Among other precious metals, silver gained 0.5% to $24.86 an ounce, platinum rose 0.4% to $1,078.10 and palladium was up 0.1% to $2,385.00.