Gold prices weakened on Monday and the dollar was broadly steady after a key U.S. inflation measure closely watched by the Federal Reserve posted its biggest year-on-year increase in May since 1992, but the rate of increase slowed since April.
The downside was capped by concerns about a spike in coronavirus infections in Asia.
Spot gold dipped 0.3 percent to $1,777.05 per ounce, after hitting one-week low of $1,770 earlier in the session. U.S. gold futures were marginally lower at $1,776.80.
Investors were reacting to mixed signals from the U.S. Federal Reserve on monetary policy tightening.
Boston Federal Reserve Bank President Eric Rosengren said the Fed might consider an interest-rate hike from near zero as soon as late 2022.
Separately, Minneapolis Federal Reserve President Neel Kashkari said high inflation readings will not last and Americans will return to the labor market in large numbers in the fall.
On the COVID-19 front, Australia’s largest city, Sydney, moved to a two-week lockdown on Saturday due to concerns over the Delta variant virus cases.
Japanese Prime Minister Yoshihide Suga said that the government is on high alert following a flare-up of infections in the Tokyo region.
Malaysia will extend a lockdown that was set to expire today.
Thailand imposed tough lockdown measures in the capital Bangkok and other provinces as the current curbs were unable to prevent the spread of the coronavirus.