Investing.com -

Investing.com - Gold futures bounced off a five-week low in North American trade on Monday, trimming losses after data showed U.S. consumer spending rose in line with market expectations in February, while core PCE prices came in below forecasts.

Gold for June delivery on the Comex division of the New York Mercantile Exchange dipped $2.20, or 0.18%, to trade at $1,221.30 a troy ounce by 12:45GMT, or 8:45AM ET, after falling by more than 1% to a session low of $1,206.20, the weakest since February 23.

The Commerce Department said that personal spending inched up 0.1% last month, matching expectations, while consumer spending for January was revised down to a gain of 0.1% from a previously reported rise of 0.5%.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

Meanwhile, the core PCE price index inched up 0.1% last month, below expectations for a gain of 0.2%. The core PCE price index rose at an annualized rate of 1.7%, missing estimates for 1.8%.

The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

The dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, retreated from an eight-day high of 96.42 following the downbeat data. It last stood at 96.14.

Last week, gold prices declined $32.40, or 2.58%, the third straight weekly loss and the biggest since November, as a stronger dollar and expectations that the Fed will raise interest rates in coming months weighed.

On Monday, Federal Reserve Bank of San Francisco President John Williams reiterated that rate hikes this year are expected if data trends continue to show sold U.S. economic growth.

The hawkish comments follow similar remarks made by a handful of Fed officials last week, sparking speculation the U.S. central bank could give serious consideration to a rate hike at its April meeting.

In the week ahead, market players will be turning their attention to a highly anticipated speech by Federal Reserve Chair Janet Yellen on Tuesday for further clues on the timing of the next U.S. rate hike.

Besides Yellen, there are other Fed speakers in the coming week, including New York Fed President William Dudley on Thursday and Cleveland Fed President Loretta Mester on Friday.

March nonfarm payrolls data and the March ISM manufacturing report, both due Friday, will also be in focus, as investors attempt to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.

Despite recent losses, prices of the yellow metal are up nearly 14% so far this year as investors seek safe havens in the face of mounting instability in other financial markets and as fears over a China-led global economic slowdown make it tougher for the Fed to raise rates.

The U.S. central bank surprised markets earlier this month by cutting its rate hike projections more than expected, down from four to two in 2016, citing the potential impact from weaker global growth and financial market turmoil on the U.S. economy.

Also on the Comex, silver futures for May delivery inched up 6.1 cents, or 0.4%, to trade at $15.26 a troy ounce during morning hours in New York, while copper futures eased up 0.1 cents, or 0.03%, to $2.230 a pound.

Trading on Monday will be light due to a public holiday in many European markets, including London, Frankfurt, Paris and Milan.