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Gold prices edged lower on Monday as the dollar inched up, although investors largely bet on the U.S. Federal Reserve hitting the brakes soon on interest rate hikes.

Spot gold fell 0.1% to $1,952.74 per ounce by 0307 GMT, around $11 lower from the three-month high hit on Friday.

U.S. gold futures were down 0.4% to $1,957.60.

The dollar hovered above its April 2022 lows, making gold more expensive for holders of other currencies. [USD/]

"Gold's post-CPI rally has paused for breath, and that leaves the potential for a technically-driven retracement to the $1,940–$1,950 region," said Matt Simpson, a senior market analyst at City Index.

Data in the U.S. last week hinted at a disinflationary trend as consumer prices grew at their slowest pace in more than two years.

"Whilst inflation remains high, markets are responding to the relative change over the absolute level of interest rates going forward. And if peak cycles are close, it is another supportive feature for gold, alongside central bank buying," Simpson added.

Hikes are expected from the Fed and European Central Bank next week, and markets see the U.S. central bank likely stop before cuts next year, while in Europe another hike is expected.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Top gold consumer, China's economy grew at a frail pace in the second quarter - up 0.8% compared with a 2.2% expansion in the first quarter - with markets expecting authorities to unleash more stimulus to support growth.

The Hong Kong stock exchange halted trading due to the approaching Typhoon Talim, while Japan's Nikkei was closed for a holiday, though futures were trading 0.3% lower. [MKTS/GLOB]

Spot silver fell 0.6% to $24.78 per ounce, platinum was down 0.8% to $963.95 while palladium fell 0.6% to $1,263.24.