(Reuters) – Gold prices slipped on Monday, as gains in the equity markets dented the appeal of the precious metal ahead of a U.S. Federal Reserve policy meeting this week.

Spot gold was down 0.2 percent at $1,299.13 per ounce by 0443 GMT. U.S. gold futures fell 0.3 percent to $1,299 an ounce.

The U.S. Fed will begin its meeting on interest rates on Tuesday, which ends with a news conference on Wednesday.

“This could be an important meeting. We’ve seen the Fed taking a much more dovish stance at the beginning of this year and particularly given the run of stronger numbers we have seen,” said Michael McCarthy, chief market strategist, CMC Markets.

“We might see Fed moving back on their dovishness and keep a balanced risk approach and if that is the case we could see a strengthening U.S. dollar and that could put pressure on the gold prices.”

Gold, which offers no yield of its own, tends to fall out of favour among investors when interest rates rise.

Investor sentiment towards gold is reflected in the reduction in net longs by speculators and a fall in holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, on Friday.

Dealers trimmed their net long position in COMEX gold in the week to March 12 for a third straight week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

“Gold prices are at a key level right now, $1,290 and $1,310 are the key support and resistance levels,” McCarthy said. “One of the most important drivers for gold is the U.S. dollar strength and the dollar is in turn beholding to the U.S.-China trade negotiations.”

Investors since last year have favoured the dollar as a safe haven against the U.S.-China trade war. Markets have been on the edge as a resolution to the dispute is taking longer than expected.

Adding pressure to bullion were gains in the equity markets.

“The precious metal though facing headwinds from riskier assets continues to demonstrate strong support amid heightened geopolitical uncertainties in the current term,” Phillip Futures said in a note.

Investors are closely watching developments around the Britain’s departure from the European Union. British Prime Minister Theresa May’s government was scrambling on Sunday to get support in parliament for her Brexit deal at the third time of asking.

Among other precious metals, palladium fell 0.5 percent to $1,551.94 per ounce, having hit record peak of $1,567.50 in the last session.

Spot silver was steady at $15.28 an ounce, while platinum was down 0.1 percent at $827.36.