IGI Logo

Gold prices edged lower on Monday as investors squared positions ahead of U.S. inflation data and a slew of central bank meetings across the world, including the Federal Reserve.

Spot gold was down 0.3% at $1,791.09 per ounce, as of 1249 GMT. U.S. gold futures fell 0.4% to $1,802.70.

"Friday's stronger-than-expected US PPI suggested that inflation is not cooling enough, which helped trigger profit taking and another rejection at $1,808, a key level of resistance for gold," said Ole Hansen, head of commodity strategy at Saxo Bank.

"Ahead of the key data print, the current strength of the market would be tested on a break below $1,765, a level where support was found on several occasions last week."

Data on Friday showed U.S. producer prices rose slightly more than expected in November, reinforcing the view that the Fed may have to keep interest rates higher for longer.

The U.S. central bank is widely expected to raise interest rates by 50 basis points at its final meeting of 2022 scheduled on Dec. 13-14.

The European Central Bank and the Bank of England are also set to announce interest rate decisions this week.

Also on the radar, the U.S. Consumer Price Index (CPI) report for November is due on Dec. 13.

"Gold could benefit if it's a softer CPI as it would raise hopes of a less aggressive Fed ... A slower (rate hike) trajectory should benefit gold and see it head for the $1,824 high," said Matt Simpson, a senior market analyst at City Index.

Meanwhile, U.S. Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in U.S. inflation in 2023.

Elsewhere, spot silver dipped 0.4% to $23.37 per ounce, platinum dropped 1.2% to $1,009.69 and palladium slipped 1.2% to $1,924.47.