FUNDAMENTALS

* Spot gold was down 0.1% at $1,977.69 per ounce, as of 0044 GMT. U.S. gold futures also fell 0.1% to $1,981.30.

* Gold prices had shot up to their highest level since March 2022 at $2,009.59 in volatile trading on Monday before retreating, as investors digested the impact of measures taken by several central banks to contain a banking crisis and stabilise global financial markets.

* Swiss lender UBS agreed to buy rival Credit Suisse on Sunday for $3.23 billion and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities.

* Markets are pricing in a 53% chance that the U.S. policymakers will hold their benchmark lending rate in the current 4.50%-4.75% range at the end of their closely-watched March 21-22 policy meeting.

* European Central Bank policymaker Robert Holzmann on Monday watered down his recent call for three further interest-rate increases of 50 basis points in quick succession.

* Gold tends to benefit from low interest rates as it reduces the opportunity cost of holding non-yielding bullion.

* The dollar edged up 0.1%, making bullion less attractive for buyers holding other currencies. [USD/]

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.38% to 924.55 tonnes on Monday from 921.08 tonnes on Friday. [GOL/ETF]

* Spot silver edged down 0.1% to $22.49 per ounce, platinum was flat at $988.33 and palladium was listless at $1,413.97.

DATA/EVENTS (GMT)

1000 Germany ZEW Economic Sentiment March

1000 Germany ZEW Current Conditions March

1400 US Existing Homes Sales Feb

U.S. Federal Reserve's Federal Open Market Committee

starts its two-day meeting on interest rates

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)