The dollar turned up 0.1 percent after falling to a near-three-week low against a basket of major currencies. Wall Street and European shares retreated while oil prices fell as investors positioned for the Fed meeting.
Gold has benefited in recent years from ultra-low rates, which cut the opportunity cost of holding non-yielding gold while weighing on the dollar, in which the metal is priced.
"It's quite resilient coming into the Fed meeting," said Phillip Streible, senior commodities broker for RJO Futures in Chicago, adding that the market's change of direction indicates uncertainty.
A small majority of forecasters are sticking to their guns and predicting the Fed will pull the trigger this week.
"A non rate hike in September could give a temporary respite to gold, but prices are unlikely to breach recent highs around $1,170," ActivTrades chief analyst Carlo Alberto de Casa said.
Hedge funds and money managers cut their bullish stance in COMEX gold contracts to a three-week low in the week ended Sept. 8, U.S. government data showed on Friday.
Other precious metals remained under pressure, with silver down 1.6 percent at $14.38 an ounce and platinum falling 1.1 percent to $954 an ounce.
Palladium fell 1.3 percent to $584.50.