Gold prices edged higher on Monday, lifted by a retreat in US Treasury yields and concerns that a surge in coronavirus cases could dampen global economic recovery, though an uptick in the dollar limited gains for the safe-haven metal.

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Spot gold was up 0.1 percent at USD 1,812.83 per ounce, as of 02:43 GMT, after falling 1 percent in the previous session.

US gold futures eased 0.1 percent to USD 1,813.70.

"COVID-driven risk aversion is driving Asian markets today after a weak finish on Wall Street on Friday," said Jeffrey Halley, a senior market analyst at OANDA.

"Some short-covering is providing modest support to gold, but it not displaying any clear momentum in either direction."

Sentiment in wider financial markets remained weak as investor risk appetite was soured by growing inflationary pressures and a relentless surge in coronavirus cases.

Many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into taking lockdown measures.

Gold is used as a safe investment during times of political and financial uncertainty.

Benchmark 10-year Treasury yields dropped to a near two-week low, reducing the opportunity cost of holding non-interest bearing gold.

However, safe-haven gains for the US dollar limited gold's appeal, as the dollar index strengthened 0.1 percent towards a three-month high against its rivals.

"Negative real yields appear to be driving gold prices in the face of a stronger USD. We expect the US dollar to weaken as other central banks hike rates," ANZ analysts said in a note.

"Inflows in gold-and silver-backed ETFs are steady as talk of fiscal tightening increases. Lean speculative positioning in both gold and silver leaves room for a price rise."

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.6 percent to 1,028.55 tonne on Friday, the lowest since May 14.

Elsewhere, silver fell 0.6 percent to USD 25.50 per ounce, palladium rose 0.2 percent to USD 2,635.65, and platinum eased 0.2 percent to USD 1,100.55.