Gold ticked down on Monday as the dollar firmed, easing from a two-week high hit in the previous session after comments from US Federal Reserve Chair Jerome Powell bolstered bets on interest rate cuts.
Spot gold inched down 0.1% at $3,367.51 per ounce, as of 1127 GMT, after touching its highest since August 11 on Friday. US gold futures for December delivery eased 0.2% to $3,412.30.
The dollar index was up 0.2%, making gold more expensive for other currency holders.
Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.
"Powell only indicated in my view a 25-bps cut for September, so there is some adjustment based on that, supporting the dollar and weighing on gold," said UBS analyst Giovanni Staunovo.
Markets are now pricing in an 87% chance of a quarter-point rate cut at the September policy meeting - compared to nearly 90% after Powell's comments on Friday - and a cumulative reduction of 48 basis points by this year-end, according to the CME FedWatch Tool.
"I expect spot gold to post fresh record highs above $3,500, assuming the Fed doesn't deviate from its easing path, while the precious metal should also enjoy ample support from sustained central bank purchases," said Han Tan, chief market analyst at investment trading platform Nemo.Money, Reuters reported.
Investors are awaiting US personal consumption prices data on Friday that are expected to show core inflation creeping up to its highest since late 2023 at 2.9%.
Gold tends to appreciate in a low-interest-rate environment, which reduces the opportunity cost of holding non-yielding bullion.
Elsewhere, spot silver lost 0.3% to $38.72 per ounce, platinum fell 1.1% to $1,346.21 and palladium was down 1% at $1,115.07.
