Gold eases on firm dollar; Markets eye US inflation data for Fed policy clues

Gold edged lower on Monday as a firmer U.S. dollar pressured prices, while investors awaited key U.S. inflation data that could shape expectations for the Federal Reserve's policy moves.

Spot gold XAU= slid 0.2% to $4,335.27 per ounce by 09:33 a.m. EDT (1333 GMT). It hit its highest level since June 17 on Friday after an unexpected drop in U.S. nonfarm payrolls.

U.S. gold futures GCcv1 dipped 0.1% to $4,394.00.

"Gold is pressured by the firm dollar index and is kind of at a pause today ahead of key inflation report that is out later this week," said Jim Wyckoff, a market analyst at American Gold Exchange.

The U.S. dollar index gained 0.2%, making dollar-priced bullion more expensive for buyers overseas. USD/

Meanwhile, Iran said it was nearing a final pact with Oman defining new shipping lanes between them through the Strait of Hormuz, but repeated that the U.S. must meet other conditions before the strategic waterway is reopened.

Among other metals, spot silver XAG= rose 0.6% to $63.96 per ounce, platinum XPT= dropped 0.5% to $1,736.45, and palladium XPD= fell 1% to $1,363.50.

Investors await the U.S. consumer price data due on Wednesday and producer price data on Thursday for clues on the Fed's interest-rate outlook.

Economists polled by Reuters expect the July consumer price index to have risen 3.4% year-on-year, versus 3.5% in June.

"The CPI data is going to be important. Inflation is starting to cool a little bit, with markets expecting a report that's not going to be hot on inflation, and will lead to gold trading sideways to higher in the near term."