Nov 9 (Reuters) - Gold prices rose on Monday as lower oil prices helped ease inflation concerns, while investors awaited US price data this week that could shape the Federal Reserve's rate outlook.
Spot gold rose 0.9% to $4,102.25 per ounce by 1125 GMT, while US gold futures for December delivery also gained 0.9% to $4,111.60.
Bullion gained about 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 US-Israeli war with Iran.
Oil prices fell on Monday after US President Donald Trump downplayed the likelihood of new strikes on Iran, though attacks on ships near the Strait of Hormuz kept supply concerns in focus.
"Gold is rising on lower oil prices, a softer dollar and easing bond yields. The Democratic sweep has sparked optimism for a US-Iran resolution and could bring more scrutiny of the AI boom, which would help contain inflation and temper Fed tightening," said Nikos Tzabouras, an independent financial markets analyst.
The dollar softened, making greenback-priced bullion more affordable for buyers overseas.
Gold prices fell 0.3% on Friday after stronger-than-expected US payrolls data reinforced expectations that the Federal Reserve could keep interest rates higher for longer, boosting the dollar and Treasury yields.
Traders currently see about an 81% probability that the Fed will raise rates in December, higher than the 73% chance before the jobs data, according to CME's FedWatch tool, opens new tab.
Although gold is typically seen as an inflation hedge, higher interest rates tend to reduce the appeal of non-yielding bullion.
Market focus now turns to US consumer price data on Tuesday and producer price figures due on Friday, which could shape expectations for the Fed's next move.
"CPI and PPI will be pivotal for gold’s trajectory. Persistent inflation would bolster the case for additional Fed tightening and weigh on bullion, while any downside surprise could fuel a further rebound," Tzabouras said.
Meanwhile, China's central bank added about 25.8 metric tons of gold to its reserves in October. This addition was its largest monthly purchase in three years, according to World Gold Council data.
Among other metals, spot silver climbed 1.4% to $52.62, platinum gained 0.6% to $1,541.72 and palladium rose 0.5% to $1,028.88.
Reporting by Sherin Sans in Bengaluru; Editing by Harikrishnan Nair and Emelia Sithole-Matarise
