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Gold prices dipped on Monday pressured by a firmer U.S. dollar, while investors focussed on the Federal Reserve's first meeting of 2025 for more guidance on the U.S. interest rate path.

Spot gold dropped 0.6% to $2,755.79 per ounce, as of 0304 GMT, after trading just below record high levels on Friday. U.S. gold futures fell 0.6% to $2,761.20.

The dollar was up 0.3% after U.S. President Donald Trump said he will impose sweeping measures on Colombia, including tariffs and sanctions. A stronger dollar makes gold expensive for other currency holders. [USD/]

"The U.S. dollar could be the main culprit for gold's weakness... However, current movement seems to suggest that downside for the yellow metal are still limited, potentially aided by safe-haven flows around U.S.-Colombia trade tensions," IG market strategist Yeap Jun Rong said.

"We may still expect more upside for gold prices ahead, as uncertainties around trade measures are likely to dominate sentiments."

Gold is considered a hedge against geopolitical turmoil and inflation. It also tends to thrive in a low interest rate environment as it yields no interest.

Investors' s focus is also on the Fed's Jan. 28-29 meeting. Fed policymakers are expected to keep rates steady but the larger story unfolding will be how the central bank confronts early moves by Trump.

Data since the Fed's last meeting in December has kept intact the core view among Fed officials that inflation will continue to move steadily, if slowly, towards 2%, with a low unemployment rate and continued hiring and economic growth.

Meanwhile, COMEX gold speculators raised net long position by 21,864 contracts to 234,358 in the week to Jan. 21, data showed on Friday.

Among other metals, spot silver dropped 1.1% to $30.26 per ounce, palladium dipped 2.1% to $967 and platinum fell 0.6% to 942.90.