- Consumer price index data due on Dec. 13
- US inflation will be much lower by end of 2023: Yellen
- Platinum, palladium down more than 2% and 3% each
Gold prices slipped on Monday as investors stayed on the sidelines awaiting US inflation data and the Federal Reserve's rate-hike decision later this week.
Spot gold was down 0.9% at $1,780.19 per ounce by 15:29 p.m. ET (2029 GMT). U.S. gold futures settled 1 per cent lower at $1,792.30.
"The markets are pulling back ahead of the Fed and the next couple of days is going to be pretty volatile," said Daniel Pavilonis, senior market strategist at RJO Futures.
The US central bank is widely expected to raise interest rates by 50 basis points at its final meeting of 2022 scheduled on December 13-14.
Interest rate decisions
The European Central Bank and the Bank of England are also set to announce interest rate decisions this week.
Lower rates tend to boost gold's appeal as it decreases the opportunity cost of holding non-yielding bullion.
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.
Focus now shifts to the U.S. consumer price index (CPI) report for November that is due on Tuesday.
"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," said Ole Hansen, head of commodity strategy at Saxo Bank.
US Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in U.S. inflation in 2023. Meanwhile, spot silver dipped 0.7 per cent to $23.30 per ounce.
"The overall scenario remains supportive (for silver), while investors are betting on solid demand in the next few years," Carlo Alberto De Casa, external analyst at Kinesis Money, said.
Platinum dropped 2.2 per cent to $999.73 per ounce, and palladium slid 3.5 per cent to $1,881.47.