Gold prices were flat on Monday, as investors awaited U.S. inflation print due this week to strengthen their bets on the size of a likely reduction in Federal Reserve's interest rates.

Spot gold held its ground at $2,497.25 per ounce, as of 0305 GMT. U.S. gold futures edged 0.1% higher to $2,526.10.

Major data points this week include the August U.S. Consumer Price Index (CPI) due on Wednesday, followed by Producer Price Index (PPI) on Thursday.

Gold has been content to just drift within an earshot of the $2,500 level ahead of key event risk in the form of CPI on deck this week and if that comes in below expectations, a stronger story will play out for gold," said Tim Waterer, chief market analyst, KCM Trade.

"Support in the $2,470-$2,480 range has limited downside moves for gold, so this will be a key area to watch in case gold comes under selling pressures."

A low interest rate environment tends to boost non-yielding bullion's appeal.

Fed funds futures traders are now pricing a 69% chance of a 25-basis-point cut at the Fed's Sept. 17-18 meeting, and a 31% chance of a 50 bp reduction, according to the CME FedWatch Tool.

Data on Friday showed that U.S. employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested the labor market was not falling off the cliff to warrant a half-point rate cut.

Meanwhile, China's central bank held back on buying gold for its reserves for a fourth straight month in August, official data showed on Saturday.

Key metals consumer China's consumer prices accelerated in August, while producer price deflation worsened, as Beijing maintained efforts to reinvigorate domestic demand.

Spot silver rose 0.3% to $27.99 per ounce, platinum gained 1% to $930.75 and palladium was up 0.7% at $916.90

(Reporting by Daksh Grover in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)