Gold edged lower on Monday, weakened by a firmer dollar and elevated Treasury yields, as investors focused on key inflation data due later this week that could underpin faster rate hikes by the US Federal Reserve.
Spot gold was down 0.1% at $1,793.86 per ounce at 10:20 ET, having hit a three-week low on Friday. US gold futures fell 0.2% to $1,794.60.
"We've got inflation working in gold's favor, but yields are pushing prices lower leading to a tug-of-war between these two factors," said Bob Haberkorn, senior market strategist at RJO Futures.
The sentiment on gold is buy-and-hold, with prices settling into a range of around $1,800, Haberkorn added.
US 10-year Treasury yields rose to their highest level in two years, as the dollar ticked up amid bets US inflation will bolster the case for higher interest rates.
Investors now await the inflation data due on Wednesday. US core CPI is expected to have risen to its highest in decades at 5.4% in December, up from 4.9% in the prior month.
Gold is considered a hedge against higher inflation, but rising US interest rates increase the opportunity cost of holding non-yielding bullion, while a stronger dollar makes the precious metal expensive for overseas buyers.
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Limiting bullion's losses, stock markets fell on Monday.
"Trader and investor risk aversion is not keen early this week, but neither is their risk appetite," Jim Wyckoff, a senior analyst at Kitco Metals, wrote in a note.
Spot silver rose 0.2% to $22.35, platinum dropped 3% to $926.75 and palladium was down 1.3% at $1,909.09.
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