Gold retreats from three-month high as investors eye US inflation data

Gold prices retreated after earlier reaching their highest level in more than three months, as investors shifted their attention to upcoming US inflation data.

Spot gold fell 0.2 percent to $4,640.39 per ounce, after hitting $4,668.19 earlier in the day. US gold futures were steady at $4,696.

Prices surged last week after the US Treasury Department announced it would double the size of long-term bond buybacks to support market liquidity. The move sparked concerns about a potential decline in the value of the dollar.

According to Reuters, TD Securities said in a note that worries over a weaker US dollar are likely to support gold in the coming weeks, as the Federal Reserve has yet to signal a clear readiness to tackle rising inflation.

The note added that it is too soon for gold to reach their target of $5,350 per ounce, given the risk of short-term interest rate hikes eventually.

The US personal consumption expenditures report, the Federal Reserve's preferred inflation gauge, is due on Wednesday.

Among other precious metals, spot silver dropped 1.3 percent to $68.01 per ounce, platinum slipped 1.2 percent to $1,853.85, and palladium fell about 1 percent to $1,345.26.