Gold prices fell on USD and rates fear

Gold prices fell on Monday, affected by the rise in the dollar, and after recent US economic data raised concerns that the Federal Reserve may raise interest rates further.

The spot gold price fell 0.2 percent to $1,837.59 an ounce by 0048 GMT. US gold futures fell 0.1 percent to $1,847.60.

The dollar index rose 0.2 percent, making bullion denominated in US dollars less attractive to buyers holding other currencies.

Financial markets now expect the Federal Reserve to raise benchmark interest rates above 5 percent by May, with rates peaking at 5.3 percent in July after recent data showed a lack of hiring in the labor market along with rising inflation and consumer prices.

Gold is considered a hedge against rising inflation, but high interest rates increase the opportunity cost of owning the yellow metal, which does not yield a return.

As for other precious metals, the spot silver price fell 0.7 percent to $21.58 an ounce, platinum fell 0.3 percent to $914.17, and palladium fell 0.6 percent to $1488.61.

Market activity is expected to be relatively limited on Monday due to a holiday in the United States.