Investing.com - Gold prices pared gains on Monday, but the precious metal remained supported as sentiment on the greenback became more vulnerable ahead of this week's highly-anticipated U.S. inflation data.
Comex gold futures were up 0.42% at $1,321.1 a troy ounce by 08:15 a.m. ET (12:15 GMT), after climbing to $1,328.8 earlier in the day.
Market participants were eyeing this week's U.S. inflation data for further clues on how fast the Federal Reserve will raise interest rates this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 90.18
Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
The greenback had strengthened broadly after the U.S. Congress passed a two-year budget agreement early Friday morning, ending a brief government shutdown.
The agreement is set to boost federal spending by almost $300 billion and suspend the debt ceiling for a year.
Government activities were temporarily shut down when a midnight deadline to pass the U.S. budget deal was missed on Thursday due to a prolonged speech by Senator Rand Paul, who said the bill would “loot the Treasury.”
Elsewhere on the Comex, silver futures rallied 1.28% to $16.35 a troy ounce.