By Clara Denina
LONDON (Reuters) - Gold rose on Monday after a three-day losing streak, as the dollar's ascent paused and uncertainty persisted over the timing of the first Federal Reserve rate increase in a decade.
Spot gold was up 0.2 percent at $1,165.85 an ounce by 1516 GMT. The metal had dropped on Friday to $1,158.77, its lowest since Oct. 13, when the dollar soared to its highest level in more than two months.
"$1,158 is seen as the next major retracement area," Saxo Bank senior manager Ole Hansen said. "Longs would be fairly resilient as long as we hold above $1,140."
Gold had risen 1 percent soon after China's surprise interest rate cut on Friday, as investors bet the U.S. central bank would be compelled to delay a rate rise given the fragility of the global economy. But buying evaporated after upbeat U.S. data increased expectations of a Fed hike this year.
Investors awaited a two-day Fed policy meeting ending on Wednesday.
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Although the Fed is not expected to raise rates at this month's meeting, the market will be watching for clues on its take on the global economy and whether a hike could come in December.
"We have gone now from thinking it was going to be September to being sometime next year," Citi strategist David Wilson said.
"I still think the medium trend is going to be downwards but we could get short-term support as people position ahead of what does or doesn't happen in the meeting this week."
The dollar edged down against a basket of currencies, while global equities moved lower, after risk appetite spurred by the monetary easing from China on Friday waned.
Investor positioning has been more bullish.
Hedge funds and money managers raised their bullish bets in COMEX gold and silver in the week to Oct. 20, data from the U.S. Commodity Futures Trading Commission showed on Friday.
Net long positions in gold rose to their highest since February.
Industrial metals fell on Monday, with platinum down 0.5 percent at $994.50 an ounce and palladium falling 1 percent to $680.97 an ounce. Silver followed gold's upside, rising 0.7 percent to $15.88 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Dale Hudson and William Hardy)