[SINGAPORE] Gold struggled to recover from losses on Monday due to strength in the dollar and as investors took a cautious stance ahead of the Federal Reserve policy meeting later this week.
Spot gold was little changed at US$1,231.20 an ounce by 0041 GMT, after dropping 1 per cent on Friday.
The US dollar rose to its highest level against the yen in three weeks on Friday after a report said the Bank of Japan is considering expanding its negative rate policy to bank loans and could cut rates further at its two-day policy review that ends on Wednesday.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Investors will also be closely monitoring the US central bank's two-day policy meeting that concludes on Thursday.
The Fed, which lifted interest rates in December for the first time in nearly a decade, is not expected to raise rates at this week's meeting but markets will be looking for clues on when the next week could be.
A Reuters poll showed on Friday showed that economists expect the Fed to deliver a rate hike in June, and follow up with another by the end of this year. But interest rate futures and bond market traders show less conviction on a series of hikes this year, underscoring an ongoing wide gap between markets and policymakers on the trajectory of rates.
Spot silver firmed at US$16.986 an ounce, after jumping to its highest in 11 months last week.
Hedge funds and money managers raised their bullish position in COMEX silver contracts to a record high in the week to April 19 when prices surged to an 11-month peak, US Commodity Futures Trading Commission data showed on Friday.
They also increased their net long positions in gold futures and options to the highest in 3-1/2 years.
Gold demand in India improved last week as jewellery retailers reopened stores after a strike, but the world's second biggest bullion market remained at a discount to the global benchmark as purchases across the region were curbed by higher prices.