Gold struggled below $2,650 at the opening of the week after a stronger US dollar (USD) following US Purchasing Managers' Index (PMI) data weighed on the yellow metal.
This week, the market's focus is on the US December labor market data on Friday as a new impetus.
At 9:30 am, gold prices were at $2,645, up 0.19% since it opened early Monday in Asian trading.
The Federal Reserve's (Fed) forecast of a modest interest rate cut could weigh on gold.
The US central bank decided to cut interest rates in December but signaled that borrowing costs would decline more slowly than expected this year.
In addition, economic uncertainty and geopolitical tensions may boost safe-haven assets such as gold.
On Sunday, the Israel-Hamas conflict heated up again as an agreement to end violence in the Gaza Strip and return hostages was reached. Palestinian officials also reported that Israeli bombings killed more than 100 civilians over the weekend.
Central bank buying activity could contribute to a rise in precious metals prices. Central banks are forecast to remain net buyers of around 8 million ounces in 2025.
