Gold steadied before a Federal Reserve meeting this week at which policymakers are expected to pause interest-rate hikes to take stock of economic headwinds and banking strains.

Bullion has held onto most of its 1.3% jump on Thursday, when a surge in unemployment claims in the US curbed bets for another rate increase this week. But there's likely to be a strong signal from the June 13-14 meeting that the Fed is prepared to keep tightening policy if needed.

The metal has traded around $1,950 an ounce this month as investors await more decisive signals on the outlook for monetary policy. Lower interest rates over the long term typically benefit non-yielding gold.

The US consumer price index print for May will be released on Tuesday, which is expected to show inflation easing from a year earlier for an 11th straight month. It would still remain far above the Fed's target, which has kept hopes for rate cuts later this year contained.

Spot gold added 0.2% to $1,964.70 an ounce as of 9:55 a.m. in London, after rising 0.7% last week. The Bloomberg Dollar Spot Index declined 0.2%. Silver, platinum and palladium were all lower.

Source: Bloomberg