Gold ekes out gains ahead of US inflation data

Gold prices rose on Monday in the run-up to the release of key US economic data including readings on inflation that could dictate the path of Federal Reserve monetary policy.

Spot gold rose 0.4% to $1,795.20 per ounce by 10:05 am EDT (1405 GMT), while US gold futures were little changed at $1,792.60.

Focus will be on the monthly US consumer price index - the Fed's preferred gauge of inflation - due on Tuesday. The August retail sales and production figures are also set for release this week.

The Fed's emphasis is on employment and it is not particularly worried about inflation, presupposing an accommodative stance that is positive for gold, said Bart Melek, head of commodity strategies at TD Securities.

Melek, however, said it could "be tough for gold to take off" as the dollar remains strong, keeping market attention on what the Fed would do at its next meeting on Sept. 21 to 22.

Gold is seen as a hedge against inflation and currency debasement but also contends with the greenback for safe-haven status.

Gold moves in tight range as investors await inflation data

The dollar index hit a multi-week high on Monday, raising bullion's cost for holders of other currencies.

Cleveland Fed President Loretta Mester said on Friday she would still like the central bank to begin tapering asset purchases this year, joining a chorus of policymakers stating plans to begin scaling back support despite weaker jobs growth in August.

Citi Research said in a note that it maintained a slightly hawkish bias heading into the Sept. 21 meeting, but a dovish surprise could allow gold to break higher towards $1,900.

Silver fell 0.1% to $23.70 per ounce and platinum eased 0.1% to $954.41, while palladium rose 0.6% to $2,152.75 after hitting its lowest level since August 2020.