* U.S. Fed's policy announcement on Wednesday
* COVID-19 vaccine hopes lift equities
* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Nakul Iyer
Sept 14 (Reuters) - Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week
Spot gold XAU= was up by 0.1% at $1,943.58 per ounce by 1135 GMT. U.S. gold futures GCv1 rose 0.1% to $1,950.10 per ounce.
"Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting," said Michael Hewson, chief market analyst at CMC Markets UK.
"If you want to have a policy of average inflation targeting, you're going to have to go into detail as to how you are going to arrive at that particular outcome."
The dollar .DXY retreated on Monday, bolstering gold's appeal for investors holding other currencies, ahead of the Fed's policy decision due on Wednesday. USD/
"If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment," said FXTM analyst Lukman Otunuga.
Market participants are also waiting for the Bank of Japan and the Bank of England's policy decisions due on Thursday.
Investors also took stock of uncertainty surrounding the UK's Brexit deal, as Prime Minister Boris Johnson's plan breaching parts of the treaty faces vote in parliament later in the day. gold's gains, AstraZeneca Plc AZN.L resumed its Phase-III trial, rekindling hopes for a potential vaccine against COVID-19 and giving a boost to global stock markets. is likely to remain trapped in a range in the near term due to the conflicting forces buffeting the commodity with major headwinds in the form of rising vaccine hopes and positive economic data from major economies, FXTM's Otunuga said.
Silver XAG= gained 0.3% at $26.83 per ounce, platinum XPT= rose 1.3% to $937.35, while palladium XPD= slipped 0.2% to $2,315.29.