2018.09.2407:10:00UTC+00Gold Holds Steady As Dollar Erases Early Gains

Gold prices held steady in cautious trade on Monday as the dollar erased earlier gains on news that China has cancelled trade talks with the United States.

Spot gold was up 0.2 percent at $1,198.61 after falling 1.3 percent on Friday. U.S. gold futures were up 0.16 percent at $1,203.40 an ounce.

China cancelled planned trade talks with the U.S. and also cancelled a planned visit to the U.S. by vice premier Liu He scheduled for this week, as a new round of U.S. tariffs on Chinese goods kicked in, triggering fears of a protracted trade dispute between the world's two largest economies.

The U.S. Federal Reserve ends its two-day monetary policy meeting on Wednesday, with economists expecting the central bank to raise interest rates by another quarter point.

The accompanying statement is likely to attract considerable attention along with Fed Chairman Jerome Powell's press conference as traders attempt to gauge the outlook for further rate hikes.