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Gold prices steadied on Monday, buoyed by lower Treasury yields and a slight pullback in the dollar, while investors braced for a 75-basis-point interest rate hike by the U.S. Federal Reserve this week.

Spot gold was unchanged at $1,726.09 per ounce, as of 0646 GMT, after declining 0.3% in early trade. It had hit a more than one-week high on Friday.

U.S. gold futures eased 0.3% to $1,722.30 per ounce.

The dollar was down 0.1% against its rivals, making greenback-priced bullion less expensive for buyers holding other currencies, while the benchmark U.S. 10-year Treasury yields hovered near eight-week lows. [USD/] [US/]

"The fall in U.S. yields on the back of global recessionary concerns has underpinned gold," said Stephen Innes, managing partner at SPI Asset Management.

"Today, we could be seeing a touch of indecision ahead of the Federal Open Market Committee which is likely to underscore the Fed dilemma of fighting inflation at the expense of growth."

The main focus this week will be on the U.S. central bank's two-day policy meeting which concludes on Wednesday, and markets are pricing in a 75 bps rate hike.

Last week, the European Central Bank joined its global peers in the fight against soaring inflation as it raised interest rates by 50 bps and is expected to hike rates until inflation falls back to its 2% target.

Although gold is seen as a hedge against inflation, rising interest rates lift bond yields, raising the opportunity cost of holding non-yielding bullion.

Gold prices have dropped more than $350, or 16%, since climbing past the $2,000-per-ounce level in early March due to the Fed's rapid rate hikes and the dollar's recent rally.

Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped risk appetite. [MKTS/GLOB]

Spot silver was down 0.2% at $18.56 per ounce, platinum was steady at $873.68, and palladium slipped 2.5% to $1,979.94