Gold prices edged higher on Monday, supported by a slight pullback in U.S. Treasury yields, although bullion's outlook remained vulnerable to aggressive interest rate hikes by central banks.

Spot gold was up 0.1% at $1,853.43 per ounce, as of 0208 GMT, while U.S. gold futures rose 0.3% to $1,856.20.

Gold was still trading below last week's highs with prices dropping about 1% on Friday after data showed U.S. employers hired more workers than expected in May and maintained a fairly strong pace of wage increases.

"Coming after the recent U.S. job report, market participants will continue to be highly sensitive to any cues on central banks' policy outlook, with guidance from the RBA and ECB on watch this week, along with the key U.S. CPI data," said Yeap Jun Rong, a market strategist at IG.

The U.S. CPI data this Friday will be the next focus for further signals about the Federal Reserve's tightening path.

The Fed is on track for half a point interest rate increases at June and July policy meetings, and Friday's jobs report raised the possibility of rate hikes even beyond. Investors also ramped up their bets on European Central Bank interest rate rises this year, and priced in a bigger, 50 basis-point hike at one of the bank's policy meetings by October.

Higher rates raise the opportunity cost of holding gold, which yields no interest.

The higher oil prices also did not provide much relief on the inflation front, translating into the risks of more persistent inflation pressuring central banks to tighten more aggressively, Jun Rong added.

In other metals, silver climbed 1.5% to $22.24 per ounce and palladium added 1.6% to $2,007.18. Platinum rose 0.6% to $1,019.79 per ounce, after hitting its highest since late March at $1,032.50 on Friday.

(Reporting by Swati Verma in Bengaluru; Editing by Rashmi Aich)