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

FUNDAMENTALS

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

* U.S. gold futures were flat at $1,728.70.

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

* Fed officials on Friday ended their public comment period ahead of the U.S. central bank’s Sept. 20-21 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 boosts the dollar.

* The U.S. Consumer Price Index (CPI) 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 a rising risk that they will have to raise their key interest rate to 2% or more to curb record-high inflation in the euro zone 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 on Friday from 968.15 tonnes on Thursday.

* Speculators cut net long position by 19,510 contracts to 1,217 in week to Sept. 6, while net short position increased in COMEX silver, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

* Spot silver gained 0.9% to $18.94 per ounce, platinum slipped 0.3% to $878.21 and palladium rose 0.2% to $2,177.47.

DATA/EVENTS (GMT)

0600 UK GDP Est 3M/3M

0600 UK GDP Estimate MM, YY

0600 UK Manufacturing Output MM

1200 India Industrial Output YY