Gold futures were up slightly Monday as the U.S. dollar softened and investors prepared for this week’s meeting of Federal Reserve policy makers.

Gold for August delivery
GC00,
+0.18%

GCQ21,
+0.18%

rose $6.70, or 0.4%, to $1,808.50 an ounce on Comex. September silver
SI00,
+0.48%

SIU21,
+0.48%

gained 23.7 cents, or 0.9%, to $25.47 an ounce.

Gold gained ground “due to the inverted correlation with the U.S. dollar, which is losing some ground as the trading week gets under way,” said Ricardo Evangelista, senior analyst at ActivTrades, in a note. “The performance of the dollar is expected to remain gold’s main driver during the week ahead.”

The ICE U.S. Dollar Index
DXY,
-0.18%
,
a measure of the currency against a basket of six major rivals, was down 0.2%. A weaker dollar can be supportive for commodities priced in the unit, making them less expensive to users of other currencies.

Meanwhile, the Federal Reserve on Tuesday will begin a two-day policy meeting of its Federal Open Market Committee.

Policy makers are expected to discuss plans around eventually slowing the pace of the Fed’s monthly bnd purchases. But investors expecting clear answers about the crucial questions of when the tapering will start and the pace of any pull back will likely be disappointed, economists said.

Read:Fed to tiptoe toward tapering this week

 “Gold traders will be paying close attention to the Fed’s policy statement, due to be released on Wednesday, as it is likely to have an impact on the dollar, depending on whether FOMC officials continue to move closer to earlier tightening, or instead reveal fears over the spread of the new delta variant” of the coronavirus that causes COVID-19, Evangelista said.

“The latter is likely to support the price of gold while the former could weaken it by propelling the dollar to new heights,” he said.

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