Prior of important inflation data due this week, gold prices surged on Monday as a result of a weaker greenback. Copper prices also increased significantly as a result of better-than-expected inflation data from China.

Spot gold soared 0.4% to $1,927.06 per ounce; meanwhile gold futures edged up by 0.4% to $1,950.45 per ounce.

The dollar reached a nearly six-month high as worries about sticky inflation and higher-for-longer U.S. rates drove the yellow metal to a sharp loss from last week. On Monday, there was considerable profit-taking against the dollar.

The U.S. consumer inflation numbers for August, which are due on Wednesday, are currently the main focus. The measurement is anticipated to have risen from the previous month, giving the Federal Reserve additional motivation to maintain higher interest rates for a longer period of time.

A higher reading of U.S. inflation might lead to further declines in gold prices and commodity markets, especially with a Federal Reserve meeting scheduled for next week. Analysts predict that consumer price index inflation will have increased by 0.6% from the previous month in August, picking up from the 0.2% increase witnessed in July.

Even while it is likely that the Fed will hold interest rates steady in September, any additional indications of persistent inflation could force the bank to increase rates this year. Already, American rates are at their highest points in more than 20 years.