Nov 9 (Reuters) - Gold prices climbed more than 1% on Monday as the dollar eased and inflationary jitters took a back seat due to lower crude oil prices, while markets awaited US inflation data later this week.
Spot gold was up 1% at $4,107.01 per ounce by 1:35 p.m. ET (1830 GMT). US gold futures for December delivery settled 1% higher at $4,114.50.
"We're seeing a lower US dollar index on this first day of the trading week," said Jim Wyckoff, a market analyst at American Gold Exchange.
"We're seeing lower crude oil prices today that suggest receding inflationary fears — that's positive for the gold and silver markets, on ideas that lessening inflation fears will allow the central banks to lean easier on their monetary policies."
The US dollar eased, making greenback-priced bullion more affordable for overseas buyers.
Oil dropped sharply after US President Donald Trump downplayed the likelihood of renewed strikes on Iran, though attacks on ships near the Strait of Hormuz kept supply concerns in focus.
Higher energy prices have fed inflation fears since the onset of the US-Israeli war on Iran in late February. Stronger inflation forces central banks to adopt a higher-for-longer interest rate stance to keep cost pressures in check.
Although gold is a traditional safe-haven asset, it loses its appeal to yield-bearing assets in a high interest rate environment.
Bullion gained around 5% last week as Democrats won control of both chambers of Congress in the US midterm elections, a result that raised hopes for an end to the war with Iran.
However, prices eased after stronger-than-expected US payrolls data on Friday reinforced expectations that the Fed could keep rates higher for longer.
Traders currently see an 82.2% chance of a December rate hike, the CME's FedWatch tool, opens new tab showed.
The market is awaiting US consumer price data on Tuesday and producer price figures on Friday, which could give more clues on the Fed's trajectory for rates.
Elsewhere, China's central bank added about 25.8 metric tons of gold to its reserves in October, the largest monthly purchase in three years, according to World Gold Council data.
Spot silver climbed 1.8% to $52.78, platinum gained 1.8% to $1,561.00, and palladium rose 0.3% to $1,026.26.
Reporting by Anjana Anil in Bengaluru; Editing by Jan Harvey and Nia Williams
