The yellow metal rebounded after finishing its second week in a row in negative territory on Friday.
The main macroeconomic driver this week will likely be the U.S. CPI data, scheduled for release on Wednesday.
"Gold edge[d] higher in early trade," said MKS PAMP Group trader Jason Cerisola. "U.S. CPI will likely be the market's focus this week given that inflation was one of the key worries behind the recent volatility."
Analysts are projecting to see very decent inflation figures from January.
"We expect both core and headline CPI to tick higher on a m/m basis to 0.4% and 0.3%, respectively, helping confirm that inflation pressures are building and that the monetary policy accommodation will continue to be unwound. Our estimates are above consensus," analysts at BNP Paribas said in a note to clients on Friday.
Last week’s gold losses came as equity markets fell sharply into corrective territory, with Dow Jones Industrial Average shedding more than 1,000 points in two sessions last week.
All commodities ended up suffering in light of the equities’ rout, said Daniel Hynes, ANZ senior commodity strategist.
"The precious sector wasn’t immune to the selloff, with silver prices leading the sector lower. Holdings of gold in ETFs continue to fall, with Bloomberg data showing another 0.7% drop last week to 2,239.2t. This is the biggest weekly decline since July 2017. These outflows are likely the result of weakness in equity markets," Hynes said in a note published early Monday.
"The longer the crisis in equities lasts, the more demand there will be for safe-haven assets," said Eugen Weinberg, head of commodity research at Commerzbank. "There should be reliable safe-haven demand at $1,300 an ounce."
Yet, traders should not expect another massive rally in gold prices either, said Jasper Lawler, head of research at London Capital Group.
"Inflation is turning and investors are wondering how central banks are going to react," Lawler said. "The gold market really needs to see higher inflation but relatively low interest rates to break out to new highs."