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Gold prices fell on Monday, weighed down by firmer U.S. Treasury yields and dollar after better-than-expected U.S. economic data lifted prospects for higher inflation.

Spot gold fell 0.4% to $1,735.90 per ounce by 0535 GMT. U.S. gold futures were down 0.4% to $1,737.10 per ounce.

"Stronger-than-expected data suggests that inflation (will be) picking up faster-than expected in months to come, which is leading to a rise

"Asia pacific markets were expected to open higher but they are trading lower this morning, raising demand for safe assets and dollar is winning that race, putting further pressure on gold."

Producer prices in the United States rose more than anticipated in March, resulting in the highest annual rise in 9-1/2 years and signalling the start of higher inflation as the economy reopens amid strengthened public health and substantial government assistance. Some investors view gold as a hedge against higher inflation, but higher Treasury yields dull some of the appeal of the non-yielding metal.

The dollar index rose 0.1% against rival currencies, making gold expensive for buyers outside the United States.

"For now, gold looks set to trade quietly in a $1,730 to $1,760 range, with Bitcoin seemingly the safe-haven asset of choice at the moment," OANDA senior market analyst Jeffrey Halley said in a note.

"In the meantime, gold remains at the mercy of the U.S. 10-year Treasury yield." Federal Reserve Chair Jerome Powell said the U.S. economy is at an "inflection point," with hopes that inflation and hiring will accelerate in the coming months, but there are dangers if a hasty reopening leads to a continuing uptick in coronavirus cases.

Elsewhere, silver fell 0.9% to $25.02 and palladium was down 0.3% at $2,630.68. Platinum slipped 0.8% to $1,189.01