Gold settled modestly lower on Monday, retreating from the 10-week highs it hit overnight on the back of weakness in global stocks, as traders cashed in gains in the metal ahead of a key Federal Reserve meeting this week.
Expectations that the Fed could trim monetary stimulus further from the $10 billion-a-month reduction to its bond-buying program late last year served to lift the dollar, while safe-haven currencies such as the yen were in demand as a sell off in emerging markets continued.
Spot gold was last at $1,260 an ounce, off 0.7 percent, having hit its highest since mid-November overnight at $1,278.01 an ounce. U.S. gold futures for February delivery settled 90 cents lower at $1,263.40 an ounce.
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