Gold ticked higher on Monday and the dollar weakened on improved risk aversion after the latest inflation data from China stoked optimism about easing deflationary pressures in the world's second-largest economy.
The dollar is also weakening after comments from Bank of Japan (BOJ) Governor Kazuo Ueda stoked hopes that Japan could soon herald a new era away from negative rates.
Spot gold edged up 0.4 percent to $1,926.49 per ounce, while U.S. gold futures were up 0.4 percent at $1,949.95.
China's consumer prices returned to positive territory in August while factory-gate price declines slowed, data showed over the weekend.
China is due to unveil data on industrial output, retail sales and house sale prices this week.
This week will also see the release of key U.S. reports on consumer and producer inflation as well as data on retail sales, industrial production and consumer sentiment.
CME Group's FedWatch Tool currently indicates a 93.0 percent chance the Federal Reserve will leave interest rates later this month but a 43.4 percent chance of another rate hike in November.
