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U.S. markets closed for Martin Luther King Day
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U.S. dollar up 0.2%
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Palladium down over 2%
Jan 16 (Reuters) - Gold prices slipped from a more than eight-month high on Monday as the dollar firmed, although expectations that the U.S. Federal Reserve will be less aggressive on raising interest rates kept bullion well above $1,900 per ounce.
Spot gold was down 0.5% at $1,911.44 as of 1330 GMT, after hitting its highest since late April at $1,929 in the session.
U.S. gold futures fell 0.3% to $1,915.60.
The dollar edged up 0.2%, making gold a less attractive bet for those holding other currencies.
"The fact that gold has managed to surpass $1,915 in the last few days was a positive signal, and now gold is briefly consolidating," said Carlo Alberto De Casa, an external analyst at Kinesis Money, adding the main trend remains positive for bullion as investors see smaller rate hikes from the Fed.
Fed funds futures are now pricing in a quarter-point interest rate hike by the U.S. central bank at its next meeting in February after data last week showed U.S consumer prices unexpectedly fell in December.
The University of Michigan Surveys of Consumers said last week the one-year inflation outlook slipped to a preliminary reading of 4.0% this month - the lowest since April 2021.
Gold, which pays no interest, tends to benefit when interest rates are low as it reduces the opportunity cost of holding bullion.
Spot silver was 1.2% lower at $23.95 per ounce, after hitting a near two-week peak.
"The growing adoption of green energy sources continues to favour fabrication demand for silver... Silver bar and coin demand continued to be high," ANZ said in a note.
"We expect silver to perform well, in tandem with gold, as investors look for cheaper alternatives to gold."
Platinum fell 0.9% to $1,054.75 and palladium shed 2.2% to $1,750.28. (Reporting by Kavya Guduru in Bengaluru; editing by Jon Boyle and Jason Neely)
