Gold slips as rising Fed taper bets boost dollar

Gold eased on Monday as the dollar firmed on expectations that the Federal Reserve would not delay its plans to taper economic support despite a disappointing US September jobs report.

Spot gold fell 0.1% to $1,754.89 per ounce by 1229 GMT, while US gold futures were little changed at $1,757.70.

Spot silver fell 0.5% to $22.55.

Bullion rallied to its highest since Sept. 22 on Friday after the latest US payrolls report, but pared gains as investors came to terms with the possibility the Fed could still have enough fodder to start weaning the economy off stimulus.

Gold is seeing some "bearish pressure" after not being able to hold on to Friday's gains, said Kinesis Money analyst Carlo Alberto De Casa.

Gold ekes out gains as investors brace for US jobs verdict

However, "a good part of tapering is already priced in" and as long as bullion holds above $1,750, it's a positive for the metal, limiting "big volatility", he added.

Gold is considered a hedge against inflation and currency debasement likely from the widespread stimulus rolled out to combat the economic hit from the pandemic.

Higher interest rates -- as monetary policy is tightened -- translate into an increased opportunity cost of holding bullion, dulling its appeal.

The dollar gained, also hurting gold's appeal for those holding other currencies.

In contrast, palladium was 2.9% higher at $2,138.16 per ounce, after hitting its highest since Sept. 10 at $2,182.67, and platinum rose 0.5% to $1,031.49, with analysts attributing the bounce to short-covering after recent declines.

Palladium is seeing a technical rebound after prices hit support around $1,870, said ANZ analyst Soni Kumari.

"Fundamentals haven't changed much with auto sector continuing to face challenges due to micro-chip shortage. Until we see auto production recovering meaningfully, which will depend on availability of semiconductors, we expect PGMs (platinum group metals) to remain volatile," Kumari added.

Platinum and palladium are used mainly in vehicle engines to reduce emissions.