Spot gold was down 0.5 percent at $1,279.92 per ounce. U.S. gold futures shed 0.5 percent to $1,281.90 an ounce.
“You’ve got a lot of people taking profits after a three-day run-up. But, a lot of people are going to take it easy as we have the Fed on Wednesday,” said Michael Matousek, head trader at U.S. Global Investors.
“That’s going to be big and everyone is going to take a big position before that in case something obscure comes out.”
The Fed will begin its two-day policy meeting on Tuesday. The central bank last month abandoned any interest rate hikes this year.
The S&P 500 and the Nasdaq hit record highs after data showed U.S. consumer spending surged in March.
The recent uplift in equities has led investors to cut their exposure to gold, with holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, falling to its lowest since Oct. 19 at 746.69 tonnes on Friday.
Holdings have fallen by over 3 percent since the beginning of this month.
Speculators also increased their bearish wagers on COMEX gold in the week to April 23, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
“We remain in a very uncertain period for gold though. On the one hand, the environment is primed for gold to come under more pressure, but when we broke through $1,280 two weeks ago, any downside momentum quickly faded,” OANDA senior market analyst Craig Erlam said.
Gold on Friday rose to its highest since April 16 at $1,288.59 and also posted its biggest weekly percentage gain in five weeks.
“We saw a nice pop higher at the end of last week as the dollar softened a little on the back of the GDP data. The headline number was strong - and much better than expected - but the underlying figures are less impressive,” Erlam said.
The U.S. GDP data instigated questions about the actual economic strength of the country, since the quarterly growth figures were largely driven by temporary factors like a smaller trade deficit and the largest accumulation of unsold merchandise since 2015.
Elsewhere, palladium slid more than 5 percent to $1,381 having climbed to its highest in a month at $1,466.42 earlier in the session.
Silver fell 1 percent to $14.92 per ounce, while platinum slipped 0.4 percent to $891.23.