Gold prices eased on Monday as some investors locked in profits after a sharp rise in the previous session, while markets awaited this week's U.S. inflation data to get cues on the Federal Reserve's rate hike path.

Spot gold fell 0.3% to $1,675.94 per ounce by 1315 GMT, while U.S. gold futures rose 0.3% to $1,680.90.

Today's move so far looks to be corrective from the strong rally on Friday, said Capital.com analyst Daniela Hathorn, adding that "a softer CPI reading will likely reignite the risk-on trade and will, by extension, help gold push higher."

Gold prices jumped more than 3% on Friday to record its best day since March 2020, as data showing an uptick in U.S. unemployment rate in October dragged the dollar.

"Whilst the data didn't give a clear picture of how the labour market is progressing, we did see unemployment creep up, which has fed into risk-on sentiment because it pushes the Fed a little closer to easing," Hathorn said.

All eyes are now on U.S. consumer price index (CPI) report due on Thursday.

Although gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion.

Four Fed policymakers on Friday indicated they would still consider a smaller interest rate hike at their next policy meeting.

But the upcoming CPI will define if it is a smaller or still large rate hike, but with interest rates still moving up in the U.S, gold continues to see downside pressure driven by ongoing ETF outflows, UBS analyst Giovanni Staunovo said.

Meanwhile, sentiment more broadly in financial markets remained weak after hopes of an easing of China's strict COVID-19 measures were quashed over the weekend.

Spot silver fell 1.1% to $20.61 per ounce, platinum rose 0.2% to $962.92, while palladium dropped 0.2% to $1,859.03.

(Reporting by Arundhati Sarkar in Bengaluru, Editing by Louise Heavens)