Gold prices fell to a three-week low on Monday, pressured by elevated Treasury yields as expectations for an imminent Federal Reserve interest rate cut faded, with investors looking ahead to this week's U.S. inflation data for more clarity.

Spot gold was down 0.9% at $2,028.03 per ounce by 2:25 p.m. ET (1925 GMT) after touching its lowest price since Dec. 18 earlier in the session.

U.S. gold futures settled 0.8% lower at $2033.5.

The release on Friday of data showing the U.S. added more jobs in December than expected by economists in a Reuters poll prompted some doubts in financial markets that the U.S. central bank would start cutting interest rates in March.

"Maybe that takes some of the rate-cut odds off the table or lowers them to some degree," said Daniel Pavilonis, senior market strategist at RJO Futures.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.

The benchmark U.S. 10-year Treasury yield remained above 4% on Monday.

The market currently sees a 69% chance of a rate cut at the Fed's March 19-20 policy meeting, according to the CME FedWatch Tool. The U.S. government is scheduled to release its monthly consumer price index report on Thursday.

"If and when a recession becomes apparent, the Fed can be expected to cut rates, likely weakening the dollar and benefiting the dollar gold price," Heraeus Metals said in a note.

Spot silver was down 0.4% at $23.08 per ounce and platinum fell 1.5% to $945.78.

Palladium lost 2.8% to $997.93, falling for a tenth straight session.

"In aggregate, price risk remains to the downside for palladium for 2024, and it is likely that the price will slip back below $1,000/oz at some point this year" Heraeus Metals said.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Kirsten Donovan, Paul Simao and Maju Samuel)