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Gold prices inched higher on Monday, supported by easing U.S. bond yields and concerns over rising Delta variant infections, while investors focused on the Federal Open Market Committee's meeting this week.

Spot gold rose 0.3% to $1,806.32 per ounce by 0343 GMT. U.S. gold futures climbed 0.3% to $1,806.30.

"There is no guarantee we have gotten rid of this scourge (COVID-19) and this is continuing to keep safe-haven bid under gold simply because that could possibly keep central banks on the dovish side," said Stephen Innes, managing partner at SPI Asset Management.

Investors are unlikely to move back into gold in a big way unless the COVID-19 situation deteriorates quite significantly, Innes said.

Coronavirus cases continued to rise over the weekend with a number of countries in Asia and Europe battling to control the outbreak of the highly contagious Delta variant.

Benchmark 10-year Treasury yields dipped, reducing the opportunity cost of holding non-interest bearing gold. [US/]

Meanwhile, the dollar index held close to a 3-1/2-month peak hit last week, weighing on the metal's appeal. A stronger dollar makes gold more expensive for other currency holders

"Gold is likely to continue taking its cue from movements in Treasury yields and the USD. We expect gold to consolidate sideways for the time being," OCBC said in a note.

Market participants now await the U.S. central bank's meeting on Tuesday and Wednesday. While no policy change is expected, investors will look out for clues on when the Fed might start reining in its easy monetary policies.

Silver rose 0.3% to $25.24 per ounce, palladium fell 0.1% to $2,668.48, and platinum was 0.2% higher at $1,063.23.