Gold inched higher on Monday, buoyed by a slight dip in the dollar and lower bond yields with investors expecting the Federal Reserve to raise benchmark interest rate by 75 basis points later this week.

Spot gold was up 0.1% at $1,728.89 per ounce by 1150 GMT. U.S. gold futures eased 0.1% to $1,726.50. The dollar index edged 0.4% lower, making greenback-priced bullion less expensive for overseas buyers.

Gold is finding support from the weakness in the dollar and global bond yields as worries about the global economy have replaced inflation fears, said Fawad Razaqzada, market analyst at City Index.

The Fed is expected to opt for another 75-basis-point hike when it meets this week, rather than a larger move to quell stubbornly high inflation as the likelihood of a recession over the next year rises to 40%, a Reuters poll found. Last month's 75 bps hike was the first of that size since 1994.

"As long as the Fed can persist with its 'pedal to the metal' approach in combating multi-decade high inflation, gold prices are set to have scarce prospects for significant upside," said Han Tan, chief market analyst at Exinity.

Although gold is considered a hedge against inflation, rising interest rates reduce the appeal of the non-yielding asset. Gold prices have dropped more than $350, since climbing past the $2,000-per-ounce level in early March, due to the Fed's rapid rate hikes and the dollar's recent rally.

Top consumer China's net gold imports via Hong Kong jumped almost fivefold in June as banks stepped up purchases and COVID curbs were relaxed.

Spot silver rose 0.2% to $18.62 per ounce. While growing recessionary fears favour fund flows into the U.S. dollar rather than gold, silver is struggling due to recent challenges in the electronics sector, ANZ said in a note.

Spot platinum rose 0.4% to $877.33, while palladium fell 1.2% to $2,007.56.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi and Susan Fenton)