The precious metal fell more than 300 pips last week. The market is anxious to see if the Fed becomes more dovish in its outlook. According to Fed fund futures data compiled by Bloomberg, most of traders are pricing in a 96 percent chance that the Federal Reserve may raise interest rates this week.
Gold futures August delivery declined 0.8 percent to settle at $1,268.40 an ounce on the Comex in New York, after slipping as much as 1 percent earlier. Higher interest rates tend to boost the dollar and bond yields, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.