Gold prices kicked off the week with modest losses in European trading on Monday, as investors looked ahead to a Federal Reserve policy meeting, while keeping an eye on political developments in the U.K.

Comex gold futures were at $1,269.17 a troy ounce by 2:45AM ET (0645GMT), down $2.20, or around 0.2%. Meanwhile, spot gold was at $1,267.07.

Gold prices fell Friday to notch a third-straight decline after falling to a one-week low of $1,266.70.

A key focus for markets this week is the Federal Reserve’s two-day policy meeting that ends on Wednesday.

With the U.S. central bank is widely expected to raise interest rates, investors’ focus will be on any fresh hints on the pace of further tightening in the months to come and next year.

Market players will also pay close attention to details of the Fed’s plan to reduce its $4.5 trillion balance sheet later this year.

The median Fed policymaker forecast is for two more rate increases by year-end, after already raising its benchmark interest rate once this year, by a quarter percentage point in March.

Meanwhile, in the U.K., the new British cabinet is set to have its first meeting later on Monday after Prime Minister Theresa May was reelected with a minority government late last week.

Media reports indicate that the new government could adopt a soft Brexit to keep the U.K. in the single market despite previous statements and aims of the Conservative leader.

Negotiations on Britain’s exit from the European Union are due to start next Monday.

Source: UK Investing.com