Gold prices dipped on Monday as the dollar ticked higher, while investors looked towards this week's US inflation data to gauge the size of an expected Federal Reserve rate cut.
Spot gold fell 0.1% to $2,495.04 per ounce by 1027 GMT. US gold futures were unchanged at $2,524.50.
The dollar index rose 0.5%, making dollar-priced gold less appealing to holders of other currencies.
Bullion, which offers no interest of its own, tends to thrive in a low-interest-rate environment.
According to Reuters, traders see a 75% chance of a 25-basis point cut at the Fed's meeting next week, and a 25% chance of a 50 bp reduction. August US consumer price data on Wednesday could change these expectations. Eyes are also on Thursday's Producer Price Index (PPI).
"If inflation numbers comes much lower than expected and raise hopes for a 50 bp cut, then gold could hit all-time highs. But even if the consensus stays for a 25 bp cut, gold wouldn't see a dramatic loss in prices as the Fed is definitely cutting rates," said Kinesis Money market analyst Carlo Alberto De Casa.
"The key support area is at $2,470 and key resistance at $2,520," he added.
Last week, a report showed US employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested the labour market was not falling off a cliff to warrant a half-point cut.
Fed Governor Christopher Waller on Friday said he could support back-to-back cuts, or bigger cuts, if the data suggests the need. Meanwhile, Chicago Fed President Austan Goolsbee said he wants to calibrate policy based on data as it comes in.
On the central bank front, the People's Bank of China held back on buying gold for its reserves for a fourth straight month in August, official data showed on Saturday.
Spot silver rose 0.7% to $28.11 per ounce, platinum gained 1.9% to $939.65 and palladium was up 1.4% at $923.25.
