Early on Monday, gold prices barely changed as markets expected new discussions between American politicians on extending the debt ceiling. In addition, attention remained on monetary policy as a result of conflicting signals from the Federal Reserve.

Spot gold muted around $1,977.80 per ounce meanwhile gold futures traded flat at $1,980.50 per ounce.

After negotiations failed to produce a compromise last week, President Joe Biden and House Speaker Kevin McCarthy are expected to continue discussions about preventing a U.S. default later in the day. This comes before a deadline for reaching an agreement in the middle of June, which has pressured markets.

However, there was little demand for safe haven assets like gold over the last week, and prices fell precipitously below $2,000 as the markets braced for likely future interest rate hikes by the Fed as a result of a run of hawkish remarks from Fed officials.

The minutes of the Fed's May meeting are due later this week, and more Fed officials are scheduled to appear later on Monday.