Gold prices drifted higher at the start of a busy week on Monday, as investors looked ahead to key U.S. economic reports to gauge how it will impact the Federal Reserve's view on monetary policy in the months ahead.

Comex gold futures inched up around $3.00, or 0.2%, to $1,277.04 a troy ounce by 3:00AM ET (0800GMT).

The yellow metal finished down $13.30, or around 1%, on Friday, but still booked a weekly gain of about 0.4%, marking its first weekly rise in that past four weeks.

Market players will keep an eye out on a few U.S. economic reports, with Wednesday's inflation data in the spotlight, for fresh clues on the likely trajectory of monetary policy.

Besides the inflation report, this week's calendar also features U.S. data on retail sales, producer prices, building permits, housing starts, industrial production, as well as surveys on manufacturing conditions in the Philadelphia and New York regions.

Meanwhile, comments from a clutch of Fed policymakers, including Chair Janet Yellen, will also be on the agenda.

The U.S. central bank is scheduled to hold its final policy meeting of the year on Dec. 12-13, with interest rate futures pricing in a 100% chance of a rate hike at that meeting, according to Investing.com's Fed Rate Monitor Tool.

Elsewhere, on the political front, tax reform will likely stay at the forefront, as markets look for any new developments on the Trump Administration's tax bill.

Some traders believe tax reforms could bolster growth, adding pressure on the Fed to raise interest rates.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.