Gold prices incurred losses in early trading, Monday, as the dollar rose, with the release of a new set of data that reinforced fears that central banks around the world will continue to raise interest rates to contain inflation.
Friday's data showed that the services sector in the United States grew at a steady rate in February, with new orders and employment rising to more than their highest levels in one year, indicating that the economy continued to expand in the first quarter.
San Francisco Fed President Mary Daly said on Saturday that if data on inflation and the labor market continues to rise more than expected, it is imperative to raise interest rates and hold them at that level for longer than Fed policymakers expected in December.
European Central Bank President Christine Lagarde said core inflation in the eurozone will remain high in the near term and therefore a 50 basis point rate hike by the European Central Bank later this month is increasingly certain.
Although gold is considered a hedge against inflation, the rise in interest rates to reduce price pressures increases the opportunity cost of holding non-returnable gold.
Prices change
The price of gold fell 0.1 percent to $ 1853.19 an ounce as of 0037 GMT, after it rose to its highest level since February 15 on Friday.
US gold futures rose 0.3 percent to $1,859.60, according to Reuters data.
The dollar index rose, making gold less expensive for buyers holding other currencies.
The spot silver price fell 0.2 percent to $21.20 an ounce, the platinum price fell 0.7 percent to $970.84, and the palladium price fell 0.6 percent to $1443.65.
