Spot gold gained 0.8 percent on Monday, extending a 1.2-percent rise in the previous session, as worries about a worsening debt crisis in the euro zone and the bloc's future drove investors to seek safety in bullion.     

Investors will focus on a policy meeting of the US Federal Reserve on Tuesday and Wednesday, where the Fed could take steps to increase downward pressure on longer-term interest rates to help spur a recovery of the world's largest economy.
       
The Group of 20 meeting on Thursday and Friday will also be on the radar, as investors fear that Greece's sovereign debt crisis could turn into a full-blown banking crisis.
      
'Gold and the dollar will remain the outperformers as equities and base metals look weak today,' said a Singapore-based trader.     

As confidence in the euro eroded, the dollar, another traditional safe haven, rose strongly against a basket of currencies.      

The strength of the greenback could potentially curb gains in gold, as it makes the precious metal pricier to buy for holders of other currencies.     

Spot gold gained 0.8 percent to $1,824.45 an ounce by 0310 GMT, after posting its biggest weekly drop since the end of June with a 2.5 percent fall, hitting a three-week low of $1,761.94 on Friday.     

US gold rose 0.7 percent to $1,827.30.           

Technical analysis suggested that spot gold is likely to zigzag up towards $1,930 an ounce, with an immediate target at $1,860, said Reuters’ market analyst Wang Tao.      

Sluggish US customer sentiment data also helped support the bullish sentiment in bullion.     

Gold prices are expected to hit $2,200 by 2012, supported by the economic uncertainties in Europe and the United States, said the chief executive of AngloGold Ashanti, the world's third-largest gold producer.      

But money managers slashed their bullish bets in gold futures and options in the week ended September 13, after the price of bullion fell sharply from record highs, according to CFTC data.  – Reuters