Gold prices edged lower on Monday after stronger than expected US inflation data increased expectations that the Federal Reserve could raise interest rates at its upcoming policy meeting.

Spot gold was down 0.2 percent at $4,339.96 an ounce at 8:30 a.m. in Singapore. The decline came after bullion fell for a third consecutive week, although prices remained close to the $4,400 level that has defined much of the recent trading range.

US underlying inflation strengthened in August, with the core consumer price index, which excludes food and energy costs, rising 0.3 percent from the previous month, according to data released Friday. Gold finished that session higher but still recorded a 1.8 percent weekly decline.

The inflation data has increased pressure on the Federal Reserve ahead of its meeting this week. Markets are pricing in an approximately 88 percent probability of a rate increase in September. Higher interest rates generally weigh on gold because the metal does not generate interest income, making it relatively less attractive compared with interest bearing assets.

The potential policy tightening also creates a difficult backdrop for the Federal Reserve as President Donald Trump continues to call for lower interest rates. Trump reiterated his demand for rate cuts on Sunday, highlighting the growing tension around the central bank's monetary policy stance.

At the same time, rising oil prices are adding to concerns over inflation. Brent crude moved toward $107 a barrel after gaining almost 9 percent last week as the conflict in the Middle East intensified.

Efforts to ease disruptions through the Strait of Hormuz also remained uncertain after a planned meeting between Iran and several Gulf nations aimed at establishing a temporary shipping lane was postponed. The delay has left the outlook for increasing shipments through the strategically important waterway unclear.

Gold has remained in a relatively narrow range around $4,400 an ounce after recovering from a level near $4,000 in July. Investors have repeatedly adjusted their expectations for Federal Reserve policy, contributing to volatility in bullion prices.

Despite the near term pressure from higher rate expectations, gold continues to attract investors seeking protection against macroeconomic and geopolitical risks. Its traditional role as a portfolio hedge could support prices if uncertainty surrounding monetary policy, inflation and the Middle East persists.

Silver also declined, falling 0.8 percent to around $64 an ounce, while platinum and palladium weakened. The Bloomberg Dollar Spot Index was marginally higher, adding another headwind for dollar priced precious metals.