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Gold prices inched higher on Monday as a softer dollar countered pressure on the non-yielding bullion from expectations of higher interest rates in the United States for longer than earlier expected.

Spot gold rose 0.2% to $1,795.97 per ounce by 1117 GMT. U.S. gold futures gained 0.3% to $1,806.10.

The dollar index dipped 0.2%, making gold less expensive for overseas buyers.

However, "to see a more sustained rebound in the value of the yellow metal, we need to get closer to the point where the Fed rate hikes end," UBS analyst Giovanni Staunovo said.

"As long as the Fed continues to indicate that it intends to increase interest rates further to fight inflation, this will keep gold prices at lower levels."

Federal Reserve Chair Jerome Powell said last week the central bank will deliver more interest rate hikes next year even as the economy slips towards a possible recession – pushing gold to a second consecutively weekly loss.

The upcoming U.S. core personal consumption expenditure (PCE) numbers on Friday could provide a catalyst for a strong move higher, said Michael Hewson, chief market analyst at CMC Markets UK.

"With many arguing that U.S. inflation has peaked, a soft number could be just that catalyst. A more resilient number on the other hand could send prices back towards the recent lows just above $1,760."

Although gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion.

Meanwhile, in top gold consumer China, COVID-19 is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai.

"Rising COVID cases in China could weigh on physical demand," UBS's Staunovo added. [GOL/AS]

Elsewhere, spot silver rose 0.3% to $23.29 per ounce, platinum gained 1.4% to $1,004.75.

Palladium advanced 1.2% to $1,733.69.