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Gold fell 1% on Monday pressured by a firmer U.S. dollar, after Federal Reserve Governor Christopher Waller warned markets that the central bank was not softening its fight against inflation.

Spot gold was last down 0.7% at $1,759.09 per ounce, as of 1313 GMT. U.S. gold futures dropped 0.4% to $1,762.70.

Bullion had reported its best weekly gain since March 2020 last week on hopes of slower rate hikes after data showed price pressure cooling in the United States.

"Expect lower gold prices going into year-end, with Fed officials reiterating that further interest rate hikes are needed to bring inflation under control and one swallow (lower CPI) doesn't make a summer (end of Fed hikes)," UBS analyst Giovanni Staunovo said.

"This likely will support the U.S. dollar as well and be another headwind for gold. (And) if these factors materialize, I would expect the other precious metals to suffer as well near-term," Staunovo added.

Spot silver retreated from a five-month peak, and was down 0.9% at $21.48 per ounce on the day. Platinum fell 2.2% to $1,006.44 and palladium slipped 1.4% to $2,011.64.

The dollar index rose 0.6%, making gold more expensive for other currency holders.

Waller said on Sunday the Fed might consider slowing the pace of rate increases at its next meeting but that should not be seen as a "softening" of its battle against inflation.

While gold is considered a hedge against inflation, rising rates tend to dull bullion's appeal as it pays no interest.

"Gold's current price looks dangerously high and it would only take a slight shift in sentiment" for the price to come quickly crashing back to $1,700 an ounce, Kinesis Money analyst Rupert Rowling said.

Meanwhile, European Central Bank board member Fabio Panetta said it must keep raising rates but needs to avoid overtightening as that could destroy productive capacity and deepen an economic downturn.