Gold prices nudged lower in thin trade on Monday, weighed down by inflation worries that clouded the US monetary policy outlook, while markets awaited developments in US-Iran peace negotiations.
Spot gold was down 0.5% at $4,588.71 per ounce, as of 0655 GMT. US gold futures for June delivery fell 0.9% to $4,600.60.
Markets in China, Japan and the UK are closed for holidays.
Federal Reserve Chair Jerome Powell closed out eight years as head of the US central bank last Wednesday with interest rates on hold and rising concern about inflation, Reuters reported.
"Gold is still feeling the lingering effects of last week's hawkish Fed messaging, particularly the notable dissenting voices pushing back against further easing," said Tim Waterer, chief market analyst at KCM Trade.
Federal Reserve officials, who dissented against the policy statement last week, said the oil price shock from the Iran war means the US Fed should be clear it can no longer lean towards interest rate cuts, with a rise in borrowing costs possible in the future.
Increasing oil prices could encourage central banks to hold interest rates higher for longer, which would pressure non-yielding assets such as gold.
Oil prices eased but held above $100 a barrel, with the lack of clarity around a potential US-Iran peace deal remaining in focus.
President Donald Trump said the United States would start helping to free ships stranded in the Gulf by the US-Israeli war on Iran from Monday, as a tanker reported being hit by unknown projectiles in the Strait of Hormuz.
Iranian state media reported that Washington conveyed its response to Iran's 14-point proposal via Pakistan, and that Tehran was now reviewing it.
"We see gold largely trading in a $4,400-$5,500 range by year-end. The upper end of that range would require a durable reduction in Middle East tensions and some easing of inflation pressures, while persistent high oil prices would keep the metal toward the lower half of the range," Waterer added.
Spot silver fell 0.6% to $74.91 per ounce, platinum held steady at $1,989, and palladium was down 0.4% at $1,519.78.
