LONDON: Gold firmed as European equities fell on Monday, but struggled to reach the $1,200 per ounce level after robust U.S. non-farm payrolls pushed the dollar to a more than five-year high.
Spot gold rose 0.2 percent to $1,193.63 an ounce by 1516 GMT. The metal lost 1.1 percent on Friday when U.S. data showed employers added the largest number of workers in nearly three years in November and wages picked up.
U.S. gold futures rose 0.3 percent to $1,194.10 an ounce.
"Earlier this year it hung around $1,300/oz for a long time so perhaps we'll stay here for a while," Macquarie analyst Matthew Turner said.
"It's getting tricky to see what is going to really push it firmly into a new range at the moment unless we see some major macro-economic shifts, but the largest now seems to have run its course - everyone expects the Fed to raise rates at some point and very few people now think that anything different is going to happen."
The strength in the economy could draw the Federal Reserve closer to raising interest rates, lift the dollar and in turn decrease demand for gold.
The dollar was trading close to its highest since March 2009 on the back of the strong jobs report.
In the years after the 2008 financial crisis, gold was boosted by central bank liquidity and a low interest rate environment, which encouraged investors to put money into non-interest-bearing assets.
Gold was supported, however, by lower European shares following soft economic data from China and Japan and an S&P downgrade of Italy's credit rating.
For now, some market players say gold could hold near $1,190, based on recent data on investor positioning.
Hedge funds and money managers pushed a bullish position in U.S. gold contracts to the highest level since August in the week to Dec. 2, data shows.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.12 percent to 720.91 tonnes on Friday, though still close to a six-year low.
Platinum rose 1 percent to $1,228.24 an ounce. Silver was up 0.1 percent at $16.23 an ounce and palladium rose 0.7 percent to $800.30 an ounce.
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