In anticipation of this week's Federal Reserve meeting, safe haven demand for gold was maintained despite a modest decline in price on Monday, with the metal still trading over the crucial $2,000 mark.

Spot gold dipped 0.2% to $2,002.22 per ounce, meanwhile gold futures muted at $2,011.70 per ounce.

Last week, the yellow metal reached a five-and-a-half-month high as investors continued to favor conventional safe havens due to the ongoing unpredictability surrounding the Middle East crisis. Over the weekend, Israel began a ground offensive against Gaza while markets watched to see if any other Arab nations would follow suit.

Now, all eyes were on Wednesday's completion of the Fed's two-day meeting, where it is anticipated that the central bank would maintain its current level of interest rates.

However, traders anticipate that the Fed would stick to its higher-for-longer policy, particularly in light of recent statistics showing that inflation has resumed while economic growth has remained strong.

The possibility of at least one more rate increase this year has not been ruled out by Fed policymakers. This view is anticipated to be influenced by the nonfarm payrolls data, which is released on Friday. The US economy's strength also provides the Fed with greater leeway to maintain higher interest rates.