Gold prices eased on Monday as investors await further U.S. economic data, while reports from last week showed that inflation was stabilising, lifting expectations that the Federal Reserve will cut interest rates later this year.
Spot gold was down 0.5% at $2,321.11 per ounce, as of 0546 GMT, after rising more than 1% on Friday. U.S. gold futures fell 0.6% to $2,335.30.
"Today's small move is probably just a little bit of an unwind of the move that we saw on Friday," said Kyle Rodda, a financial market analyst at Capital.com, adding that in the long run fundamentals are very constructive for gold, but are data-dependent.
U.S. retail sales data is due on Tuesday, weekly jobless claims on Thursday and flash PMIs on Friday. Several Fed officials are also scheduled to speak this week.
"With some signs of weakness emerging in the U.S. economy, which could weaken the U.S. dollar and also increase expectations of rate cuts going forward, gold is in a great position to take advantage," Rodda added.
Data released last week showed some weakening in price pressures in the U.S., suggesting that the labor market was losing momentum, keeping hopes alive for a September rate cut.
Traders are seeing a 68% probability of a cut in September, according to the CME Group's FedWatch Tool, compared to 63% before the producer prices data on Thursday.
However, Minneapolis Fed President Neel Kashkari on Sunday said it's a "reasonable prediction" that the U.S. central bank will cut interest rates once this year, waiting until December to do it.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
In other metals, spot silver fell 1.4% to $29.13 per ounce, platinum was down 0.5% at $953.30 and palladium lost 0.1% at $889.21.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Subhranshu Sahu, Sonia Cheema and Sherry Jacob-Phillips)