The metal rose 2.4 percent last week in its best weekly gain in more than five months, as investors bought gold on fears of rising inflation in the United States. US gold slipped 0.4 percent to $1,350 per ounce.
The dollar index, which measures the greenback against a basket of currencies, was up 0.1 percent at 89.174, after slipping by the same percentage earlier in the session. "The dollar index is still not showing any clear sign of robustness and it appears that the overall bearish trend (for the dollar) could continue," said Naeem Aslam, chief market analyst at Think Markets UK Ltd.
"The weaker dollar is boosting the gold shine. The precious metal could test the resistance of $1,384, and this is despite the fact that the Fed could change its stance towards a more hawkish monetary policy," Aslam said. The minutes of the US Federal Reserve's last policy meeting, held amid the equities tumble on January 30-31, are due on Wednesday. Besides the outlook on rates, markets will be keen to see what the Fed makes of the gyrations in markets.
"When coupled with inflationary concerns heightening and a probable follow-up correction in equities markets around the corner, gold's safe-haven demand should continue to glitter," said Stephen Innes, APAC trading head at OANDA. Safe-haven buying could also emerge as political tensions rise in Washington, ANZ analysts said in a research note.
A 37-page indictment filed by US Special Counsel Robert Mueller charged 13 Russians and three Russian companies for meddling in the 2016 US presidential election. Russia denounced the allegations. Hedge funds and money managers cut their net long positions in COMEX gold in the week to February 13, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
Trading is expected to be slower than usual this week due Lunar New Year celebrations in China. Monday is also a market holiday in the United States. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.39 percent to 824.54 tonnes on Friday.