U.S. gold futures were up 0.2 percent at $1,329.9.
"What we're seeing is a reversal of expectations that U.S. interest rates would rise in September," said ICBC Standard Bank analyst Tom Kendall. "The idea that monetary policy is going to stay supereasy is good for gold."
The U.S. Federal Reserve's next policy meeting takes place Sept. 20-21. A decision to keep policy on hold could mean a lower U.S. currency, which would make dollar-denominated gold cheaper and more attractive for non-U.S. firms.
The U.S. Labor Day holiday is expected to keep volumes subdued on Monday, but markets will closely watch new U.S. data releases and any speeches from Fed officials for clues to the timing of any rate moves.
"We have seen the lows for the time being now in the market and (gold) will stay between $1,310 and $1,350 for the foreseeable future," Marex Spectron said in a note. "The countdown has already begun to ... the conclusion to the FOMC meeting."