NEW YORK (Dow Jones)--Gold futures were steady on Monday amid buzz that the Fed may further ease monetary policy and as continued worries after weaker payrolls data last week support the metal.
The most actively traded gold contract, for December delivery, recently was up 60 cents, or 0.05%, at $1,205.90 an ounce on the Comex division of the New York Mercantile Exchange.
"It is benefiting from the prospect that the Fed does some additional quantitative easing tomorrow," said Tom Pawlicki, analyst with MF Global in Chicago.
Attention was focused on the Federal Reserve's interest rate decision and accompanying language on the economy on Tuesday.
Some think the Fed may offer further accommodative monetary policy after weaker-than-expected U.S. nonfarm payrolls data and reports the central bank could consider changing the way it manages its massive portfolio, effectively preventing a tightening in policy. Interest rates are expected to remain low.
Although inflation is also expected to remain low - ostensibly bearish for gold as an inflation hedge - ultra-low interest rates have been supporting gold prices. They reduce the opportunity costs of holding gold, which pays no interest itself.
Any additional policy easing could also weaken the U.S. dollar, benefiting dollar-denominated gold by making it less expensive for buyers using other currencies.
"We expect them to take a very dovish stance on policy," said Standard Bank analyst Walter de Wet. "On top of low inflation, last week Friday's U.S. non-farm payroll numbers confirmed sluggish job growth in the U.S."
Gold gained on Friday, as investors' wanted a perceived safer place to put their money after market sentiment swooned on news that the U.S. economy lost 131,000 jobs in July, versus economists' expectations for a drop of just 60,000.
Those jitters were continuing Monday, with market uncertainty keeping gold supported as a refuge, Pawlicki said.
