Gold steady as investors await Fed rate decision

*Goldman Sachs flags risk of gold pullbacks

*U.S. Fed two-day policy meeting begins on Tuesday

*Fed seen cutting rates for first time since December

Gold prices remained steady on Monday as investors awaited a widely expected rate cut by the U.S. Federal Reserve this week, while profit-taking and a firmer dollar kept gains in check.

Spot gold held its ground at $3,642.65 per ounce, as of 0606 GMT. Bullion climbed about 1.6% last week, reaching a record high of $3,673.95 on Tuesday.

U.S. gold futures for December delivery were down 0.2% at $3,680.20.

The temptation by traders to lock in profit and some resilience from the dollar putting pressure on gold, KCM Trade Chief Market Analyst Tim Waterer said.

"The bullish outlook remains in place; however, a period of consolidation or a minor pullback would arguably be a healthy outcome that supports gold's ambitions for hitting loftier price targets down the road," Waterer said.

The U.S. dollar index edged 0.1% higher, making greenback-priced bullion more expensive for overseas buyers.

U.S. inflation data for August came in slightly above expectations on Thursday, but investors anticipate this will not deter the Fed from cutting rates by a quarter-percentage-point on Wednesday.

"The risk for gold this week is that the Fed may not be so clear-cut in signalling when further rate cuts could arrive," Waterer said.

Non-yielding bullion, often considered a safe-haven asset during broader uncertainty, tends to perform well in low-interest rate environment.

The Fed's meeting comes amid challenges, including a legal dispute over its leadership and U.S. President Donald Trump's efforts to exert more control over the interest rate policy and the central bank's broader role.

For gold, "while we see the risks to our $4,000/toz mid-2026 forecast as skewed to the upside, rising speculative length raises the risk of tactical pullbacks, as positioning tends to mean-revert," Goldman Sachs said in a note on Friday.

Speculators reduced their net long positions by 2,445 contracts to 166,417 in the week ended September 9.

Elsewhere, spot silver was up 0.1% at $42.20 per ounce, platinum gained 0.5% to $1,397.59 and palladium rose 0.2% to $1,197.88.