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Gold bounced back on Monday, inching closer to last week's 13-month high as the dollar remained under pressure ahead of the U.S. Federal Reserve's policy meeting.

Spot gold rose 0.4 percent to $1,252.50 an ounce by 0009 GMT while U.S. gold eased 0.5 percent to $1,253.40 an ounce.

The main focus is the U.S. Federal Reserve's policy meeting on March 15-16. The Fed lifted rates for the first time in nearly a decade in December.

The relatively weak dollar and a repricing of expectations for U.S. interest rate rises have helped gold rebound by more than 18 percent this year so far. Bullion regained its role as a shelter for risk-averse investors, in the face of tumbling equities and fears of a global economic slowdown.

Hedge funds and money managers increased their bullish position in COMEX gold to the highest in 13 months in the week to March 8, U.S. Commodity Futures Trading Commission data showed on Friday, as safe-haven buying lifted prices to the highest since February 2015.

Gold futures on the COMEX division of the New York Mercantile Exchange fell Friday as U.S. equities rebounded sharply.

The most active gold contract for April delivery fell 13.4 U.S. dollars, or 1.05 percent, to settle at 1,259.40 dollars per ounce. For the week, gold futures declined 0.89 percent.

Energy prices increased on Friday, leading a rally in U.S. equities, putting extensive pressure on gold as the stronger U.S. equities dulled investor interest in the precious metal.

Traders are also waiting for the U.S. Federal Reserve's Federal Open Market Committee meeting next week for an indication on the timing of a potential rate hike.

Going into the weekend, participants in the weekly Kitco gold survey look for gold to maintain its upward momentum after the yellow metal hit a 13-month high this week. Kitco’s online survey received 1,085 votes, of which 829, or 77%, were in the bullish camp for next week. Seven of 11 analysts taking part in a Wall Street survey, or 64%, were bullish.

Reference: Reuters, Kitco, Xinhua