NEW YORK: Gold prices inched lower on Monday as weakness in the US dollar countered rising yields on expectations of higher interest rates, as markets look for fresh catalysts amid thin trading.

Spot gold fell 0.2% to $1,789.29 per ounce by 12:14 p.m. ET (1714 GMT), while US gold futures were down 0.1% to $1,798.00.

“The main thing is we’re just seeing a quieter day. We’re starting to see some pre-holiday trading set in and the gold and silver traders are looking for a fresh fundamental input after recent central bank data,” said Jim Wyckoff, senior analyst at Kitco Metals.

US Treasury yields rose on Monday, while a selloff in European government bonds also weighed on the US market, while the dollar eased.

US Federal Reserve Chair Jerome Powell said last week the central bank will deliver more interest rate hikes next year. Other major central banks have also signalled the same.

Although gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion.

Prices could trade sideways to higher into the end of the year, with some early bargain hunting in the gold market once bigger institutions and funds start to make some new purchases, Wyckoff added.

In top gold consumer China, COVID-19 is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai.

However, the government said it would step up measures to stabilise its economy amid damage from COVID-19.