(Updates prices)
* Dollar index fell 0.1% against key currencies
* U.S. Fed's policy meeting due on Jan. 26-27
* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa
By Sumita Layek
Jan 25 (Reuters) - Gold prices inched lower on Monday due to concerns that a massive economic stimulus in the United States may not be passed smoothly, although a weaker dollar limited bullion's losses.
Spot gold XAU= fell 0.1% to $1,850.91 per ounce by 0822 GMT, having dropped 0.9% in the previous session. U.S. gold futures GCv1 fell 0.2% to $1,851.80.
U.S. President Joe Biden's administration tried to head off Republican concerns that his $1.9 trillion pandemic relief proposal was too expensive on a Sunday call. seeing bigger question marks over the passage of Biden's stimulus package, Senate Republicans are starting to object with particular parts of the package," said Lachlan Shaw, National Australia Bank's head of commodity research.
"So, it does raise the question about the speed and the timing of the package. (Although,) some of the issues of the vaccine delays in the U.S. are perhaps tilting the balance in odds of favour of that stimulus," Shaw added.
Gold is considered a hedge against inflation, likely from widespread stimulus.
U.S. coronavirus cases crossed 25 million on Sunday as pace of vaccinations remained sluggish, while the European Union's vaccination drive was hit by AstraZeneca Plc's production problems. dollar .DXY shed 0.1% against rival currencies, making gold attractive for holders of other units. USD/
Investors now await the U.S. Federal Reserve's policy meeting due on Jan. 26-27.
"The Fed is likely to take the conservative course and wait for additional data and assume fragility, given that the short-run effects of tackling COVID-19 more aggressively could weaken domestic economic activity," said Nicholas Frappell, global general manager at ABC Bullion.
"The longer term outlook and technical support remain bullish," so with prices above $1,840, gold could move back up to $1,870-$1,880, he added.
Silver XAG= gained 0.3% to $25.47 an ounce, platinum XPT= rose 0.1% to $1,099.41, and palladium XPD= lost 0.1% to $2,351.84.