Gold prices eased on Monday, weighed down by a firmer dollar and higher Treasury yields while traders await a slew of U.S. economic data for guidance on the U.S. Federal Reserve's interest rate stance.

Spot gold lost 0.5% to $2,732.98 an ounce by 1230 GMT. Bullion hit a record high of $2,758.37 last Wednesday, lifted by safe-haven demand in the face of market risks from continuing conflict in the Middle East and Ukraine.

U.S. gold futures declined 0.3% to $2,745.10.

The dollar index was on track for its best month since April 2022, with the currency's strength making gold less attractive for buyers holding other currencies. Yields on benchmark 10-year Treasuries, meanwhile, rose to a three-month high.

"Prospects of lower U.S. interest rates have room to support further investment demand and lift gold prices. We look for gold to hit $2,900/oz in 12 months," said UBS analyst Giovanni Staunovo.

Major data due this week includes ADP employment on Wednesday, U.S. Personal Consumption Expenditures (PCE) numbers on Thursday and Friday's payrolls report.

Traders see a nearly 97% chance of an interest rate cut of 25 basis points by the Fed in November, which would provide further support for non-yielding gold.

On the physical front, Chinese gold consumption dropped 11.2% year on year in first three quarters of 2024 as high prices dented demand for jewellery, the state-backed gold association said.

"While physical demand in Asia, particularly in China, has been weak lately, I guess the focus when it comes to gold demand is shifting from East to West," Staunovo added.

Spot silver was down 0.8% at $33.42 an ounce and platinum lost 0.3% to $1,019.30.

Palladium eased 0.6% to $1,186.73, having hit a 10-month high in the previous session after the news that the United States asked Group of Seven allies to consider additional ways to restrict Russian revenue from the metals sector by exploring restrictions on palladium and titanium.

(Reporting by Anushree Mukherjee in Bengaluru Editing by David Goodman)