Gold settled beneath the key $1,800 level on Monday with longs in the yellow metal engaging in typical pre-Fed shadow boxing with shorts as taper and rate expectations reared their heads again.

This is going to be a busy week for markets with the Federal Reserve’s monthly policy statement, along with Chairman Jerome Powell’s news conference, on Wednesday.

The Fed aside, on Thursday, investors will also get a first look at second-quarter US GDP, or Gross Domestic Product, which is expected to show the peak of post-pandemic recovery.

Meanwhile, on Friday, the euro zone is to release a slew of data, including reports on inflation, GDP and unemployment.

Front-month gold futures on New York’s Comex settled down $2.60, or 0.1%, at $1,792.20 an ounce.

Gold longs managed to hold on to the $1,800 territory last week despite the yellow metal posting its first weekly loss in five week amid a disconnect from inflation expectations in the United States.

The Fed’s all-important Federal Open Market Committee isn’t expected to make any policy changes for July, although more details will likely emerge on the tapering discussions that started in June.

The Fed’s policy statement will be scrutinized for any mention of the timeframe for tapering its asset purchase program, although Powell made it clear in his recent testimony to Congress that the U.S. economy still needs the central bank's full support.

In June, policymakers began debating when to start cutting monthly purchases of $120 billion of Treasuries and mortgage-backed securities.

Powell may indicate that while a discussion on tapering has started, there is still time before officials reach a conclusion on what they will do. Policymakers are expected to highlight the risk from the rapidly spreading Delta variant, which investors worry could derail the economic recovery.

Most analysts expect the Fed to give a clearer indication of its plans for scaling back its quantitative easing program at its annual conference in Jackson Hole, Wyoming, in late August, before a formal announcement on tapering later in the year.

Aside from the Fed meeting, investors will get an update on the strength of the U.S. economy with an end-of-month data dump.

New home sales on Monday fell for the third month in a row in June, declining almost 20% from a a year ago.

The highlight is on Thursday with a first look at second quarter GDP and while expectations have been trimmed back in recent weeks, growth is still expected to be strong at 8.6% annualized. This would mark the recovery of all the lost output caused by the pandemic.

Figures on personal income and spending are due Friday, which include the Fed’s rumored favorite measure of inflation – the core personal consumer expenditure price index.

In the euro zone, second quarter GDP data on Friday will give investors some insight in the strength of the bloc’s economic recovery from a double dip recession as vaccinations pick up.

Meanwhile, inflation figures the same day are expected to show inflation hit the European Central Bank’s 2% target in July. The ECB has said inflation may be allowed temporarily to exceed its target when "especially forceful or persistent" monetary support is needed.

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