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U.S. dollar index down 0.1%
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Fed seen raising rates above 5% by May
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Fed minutes, U.S. PCE data due this week
Feb 20 (Reuters) - Gold prices were stuck in a tight range on Monday, as bets of more interest rate hikes from the U.S. Federal Reserve dimmed the outlook for non-yielding bullion.
Spot gold was up 0.1% at $1,844.24 per ounce, as of 0642 GMT, after falling to its lowest since late December in the previous session. U.S. gold futures rose 0.2% to $1,853.10.
Higher interest rates discourage investment in non-yielding gold, although it is considered a hedge against soaring prices.
"Recent positive economic data and comments from the Fed are likely to restrict traders from taking big bets on gold on expectations of further rate hikes," said Hareesh V, head of commodity research at Geojit Financial Services.
"Gold may trade lacklustre inside a tight range in the immediate run."
Recent economic data showed signs of a resilient U.S. economy, higher consumer prices, a rebound in producer prices and a tight labour market, sparking concerns that the Fed would keep interest rates higher for longer.
Several Fed officials last week signalled that more rate hikes were needed to bring inflation down to the central bank's 2% target.
Investors are now awaiting the minutes of the Fed's latest policy meeting due to be released on Wednesday. Money markets are expecting the U.S. central bank to raise benchmark rates above 5% by May, with a peak in rates seen at 5.3% in July.
The dollar index eased 0.1%, making greenback-priced bullion more attractive for buyers holding other currencies.
Investor attention will also be on the Fed's preferred inflation measure, the U.S. personal consumption expenditures (PCE) data for January, due later this week for cues on inflation.
Spot silver added 0.2% to $21.76 per ounce, platinum gained 0.4% to $920.52 and palladium rose 0.3% to $1,502.05.
Market activity could be relatively low on Monday due to a holiday in the United States. (Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu Sahu and Nivedita Bhattacharjee)
