Gold rose on Monday as the prospect of further sanctions on Russia over its invasion of Ukraine bolstered bullion's safe-haven appeal, though a stronger dollar and rising U.S. Treasury yields capped a further rise.

Spot gold XAU= was up 0.6% to $1,934.93 per ounce by 1455 GMT, while U.S. gold futures GCv1 were up 0.8% to $1,938.90.

There is a possibility of even higher inflation due to a pandemic-related shipping slowdown in China as well as the war in Ukraine, which bodes well for gold, said Daniel Pavilonis, senior market strategist at RJO Futures.

Investors also are looking ahead to the release on Wednesday of the minutes from the Federal Reserve's last policy meeting for clues as to the possibility of the U.S. central bank raising its benchmark overnight interest rate by half a percentage point next month. (Full Story) (Full Story)

The dollar index =USD rose to a one-week peak on the back of rising U.S. Treasury yields, curbing gold's rise, amid expectations that U.S. interest rates will rise sharply. USD/ US/ FEDWATCH

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

Global outrage spread on Monday over the killings of civilians in northern Ukraine and looked set to galvanise the West into slapping additional sanctions against Moscow, which could possibly include Russia's energy exports. (Full Story)

"Safe-haven demand may ease if peace talks between Russia and Ukraine are successful, but inflation looks set to remain elevated, which could continue to support the gold price," analysts at Heraeus Precious Metals wrote in a note.

Meanwhile, the S&P 500 .SPX and Nasdaq Composite .IXIC indices opened higher on a jump in shares of Twitter and megacap stocks, dimming bullion's appeal. .N

Among other precious metals, spot silver fell 0.3% to $24.54 per ounce, platinum XPT= rose 0.2% to $987.29, and palladium XPD= rose 0.9% to $2,296.00.