Prices of gold fell to a one-week low on Monday, amid growing concern that the Federal Reserve will increase interest rates aggressively to combat inflation.

Spot gold was down 0.43 per cent at $1,689.64 per ounce as of 9.20am UAE time.

In the UAE, gold prices fell by one dirham per gram at the opening of the markets on the first day of the week.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh204.25 per gram on Monday morning, down by one dirham from its last close on Friday. Among the other variants of the precious metal, 22K opened at Dh192.0 per gram, 21K at Dh183.25 and 18K at Dh157.0 per gram.

The dollar index was steady after touching a one-week high on Friday. A stronger greenback makes gold costlier for buyers holding other currencies.

According to IG market strategist Yeap Jun Rong, gold prices are taking their cues from last week's rate-hike expectations.

According to data released on Friday, US job growth slowed moderately in September, while unemployment rate fell, signaling a resilient economy and putting an end to expectations of a Fed pivot.