Gold edged lower on Monday as the dollar got a boost after hawkish comments from Federal Reserve Chair Janet Yellen left the door open to a US interest rate hike as early as next month.

The case for raising US interest rates has strengthened in recent months due to improvements in the labour market and expectations for moderate economic growth, Fed Chair Janet Yellen said on Friday.

Spot gold had dipped 0.21 percent to $1,318.06 per ounce at 0614 GMT. The metal closed last week down 1.5 percent.

US gold futures fell 0.35 percent to $1,321.20.

"We think the pressure on gold will likely increase as we go into September, as participants are now more willing to bet on a rate hike given what they have gleaned from top Fed officials on Friday," INTL FCStone analyst Edward Meir said in a note.

Gold is highly-sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

Spot gold may drop to support at $1,308 per ounce, as suggested by its wave pattern and a Fibonacci ratio analysis, according to Reuters technical analyst Wang Tao.

"I think gold prices will still see support at about $1,300 despite what has been said in the Jackson Hole (Fed) symposium. It is of no doubt that the rate hike expectations have gone up for the year ahead," said OCBC Bank analyst Barnabas Gan.

Given the fact that the US presidential election is due and the full blown consequences of Britain's vote to leave the European Union remain to be seen, there is still some risk-aversion in global markets and gold should pick up to $1,350 by year-end, Gan added.

Hedge funds and money managers increased their net long position in COMEX gold contracts in the week to Aug. 23, while they cut it in silver, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

The dollar stood tall in Asian trading on Monday with the dollar index, which tracks the greenback against a basket of six rivals, steady at 95.564. Earlier in the session, the index rose as high as 95.608, its loftiest since Aug. 16.

Among other precious metals, spot silver dropped 0.81 percent to $18.46 per ounce. On Monday, the white metal fell as far as $18.36, its lowest in nearly two months.