Gold prices started the week on the back foot on Monday, moving away from their strongest level in more than a year as investor concern over a standoff between the U.S. and North Korea eased.

Comex gold futures were at $1,339.96 a troy ounce by 2:40AM ET (0640GMT), down $11.30, or around 0.9%, and well below Friday's peak of $1,362.40, which was the best level since Aug. 3, 2016.

Appetite for safe-haven assets eased amid relief that North Korea didn't conduct a weapons test over the weekend to mark the anniversary of the country's founding.

There had been speculation in the lead up to the weekend that North Korea could conduct its next missile test then to celebrate the occasion.

Risk sentiment received a further boost after Hurricane Irma struck the U.S. southeast with less force than once feared, scaling back estimates for economic damage.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was almost 0.3% higher at 91.55, after skidding to a 2-1/2-year low of 90.99 on Friday.

Gold prices notched a third weekly gain in a row last week. The yellow metal has been well-supported recently amid concerns over geopolitical uncertainty on the Korean peninsula and reduced expectations of U.S. monetary policy tightening.

Global financial markets will focus on a key batch of U.S. economic data in the week ahead, with Thursday's inflation report in the spotlight, for further clues on the timing of the next Federal Reserve rate hike.

Markets remain skeptical the Fed will raise rates again before the end of this year due to worries over the subdued inflation outlook, but it is widely expected to start the process of reducing its balance sheet sometime this fall.

Elsewhere on the Comex, silver futures sank 25.4 cents, or about 1.4%, to $17.86 a troy ounce. It rose to a more than four-month peak of $18.29 in the prior session.

Among other precious metals, platinum shed 0.7% to $1,003.95, while palladium tacked on 0.8% to $939.35 an ounce.