Gold prices fell on Thursday, touching a more than one-week low, after stronger-than-expected US inflation data and hawkish remarks from Federal Reserve officials boosted the dollar and cemented expectations of an interest-rate hike next month.

Spot gold fell 0.2% to $3,977.99 per ounce by 0506 GMT, after touching its lowest since November 4 earlier.

US gold futures for December delivery dropped 0.4% to $3,983.20.

The dollar climbed to a 19-month high against major peers on Thursday, making greenback-priced bullion more expensive for holders of other currencies.

"The (gold) market has had a meaningful pullback over the past several days in the wake of that US inflation data and the rise in rate hike expectations around that but I think the markets are pointedly struggling for a follow through," said Ilya Spivak, head of global macro at Tastylive.

The odds of a half-percentage-point Fed rate hike next month surged after data on Tuesday showed that US inflation accelerated more than expected in October and policymakers signalled a willingness to tighten policy more aggressively.

Traders are now pricing in an interest-rate hike by the central bank next month and another in March next year, according to the CME FedWatch tool.

Although gold is typically seen as an inflation hedge, higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.

Market participants now await the US Producer Price Index report due on Friday.

"We continue to see two-way risks in the near term, with oil prices, yields and US dollar remaining important drivers. While the macro backdrop has become less favourable for gold, we are not turning bearish on its medium-term prospects," analysts at OCBC said in a note.

Among other metals, spot palladium rose 0.5% to $1,032.63 per ounce, after hitting its highest level since October 22 on Wednesday. - Reuters