Gold ticks higher as dollar hovers near recent lows

Spot gold had risen 0.1% to $1,717.17 per ounce, US gold futures were flat at $1,728.70

Gold prices ticked higher on Monday, as the dollar hovered near recent lows, with investors focusing on a key US inflation reading, as it could influence the size of the US Federal Reserve's next interest-rate hike.

Spot gold had risen 0.1% to $1,717.17 per ounce as of 0057 GMT.

US gold futures were flat at $1,728.70.

The dollar index held close to a more than one-week low hit last Friday. A weaker dollar makes gold less expensive for buyers holding other currencies.

Fed officials last Friday ended their public comment period, ahead of the US central bank's Sept 20 to 21 policy meeting, with strong calls for another oversized rate increase to battle high inflation.

Higher interest rates increase the opportunity cost of holding the non-yielding bullion, and boost the dollar.

US consumer price index data, due on Tuesday, is expected to show that prices rose at an 8.1% pace over the year in August, compared with an 8.5% print for July.

Meanwhile, European Central Bank policymakers see rising risk that they will have to raise their key interest rate to 2% or more to curb record-high inflation in the eurozone, despite a likely recession, sources told Reuters.

Physical gold demand in some Asian hubs remained firm last week, as lower prices lured buyers, although an uptick in domestic rates restrained purchases in India.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.16% to 966.64 tonnes last Friday, from 968.15 tonnes on Thursday.

Speculators cut their net long position by 19,510 contracts to 1,217 in the week to Sept 6, while their net short position increased in Comex silver, the US Commodity Futures Trading Commission said last Friday.