Gold edged higher on Monday, buoyed by a slight pullback in the U.S. dollar as market participants grew more confident the Federal Reserve may have finished raising interest rates.
Spot gold rose 0.1% to $1,940.80 per ounce by 1200 GMT. U.S. gold futures for December delivery rose 0.03% to $1,967.50 per ounce.
U.S. gold futures were steady at $1,967.50, with thin trading expected as U.S. markets are closed for the Labor Day holiday.
The Fed is likely done raising interest rates, traders bet on Friday after a jump in the U.S. unemployment rate and moderate wage growth suggested that labour market conditions were easing.
The dollar index eased 0.2%, making greenback-priced bullion more attractive to holders of other currencies. [USD/]
"More influential for gold going forward is going to be the shifting expectations for the first rate cut from the Fed, but also then the pace of rate cuts thereafter," said Craig Erlam, senior markets analyst at OANDA.
"September is almost nailed on at this point," Erlam added, referring to the Fed's upcoming monetary policy meeting on Sept. 19-20, when markets mostly expect rates to be left unchanged.
Data since the last policy meeting has further added to the impression that the U.S. economy is cooling without cracking, bolstering the case against further rate increases and in turn, supporting zero-interest-bearing gold.
"The precious metal will be at the mercy of what happens to Treasury yields leading up to the September FOMC meeting," said KCM Trade Chief Market Analyst Tim Waterer.
"If we do see a retreat in yields based on interest rate expectations being reigned in, this would be a positive development for gold." [US/]
At least seven Fed officials are due to speak this week.
Silver eased 0.4% to $24.06 per ounce, platinum fell 0.5% to $955.88 while palladium gained 0.5% to $1,224.04.