NEW YORK: Gold prices retreated from two-week highs on Monday, pressured by a firmer US dollar, though losses were limited as signs of a cooling US labour market eased expectations of a Federal Reserve rate hike.
Spot gold was down 0.8 percent at USD4,143.12 per ounce by 12:02 p.m ET (1602 GMT) after hitting its highest since June 22.
US gold futures for August delivery climbed 0.7 percent to USD4,155.50 per ounce.
“The US dollar index is a little higher today and that is a daily bearish element (for gold),” said Jim Wyckoff, a market analyst at American Gold Exchange.
The dollar gained 0.2 percent, making the yellow metal more expensive for overseas buyers.
Data last week showed a marked slowdown in US job growth in June alongside downward revisions to payrolls for the prior two months, leading markets to scale back expectations of a near-term Fed rate hike.
While gold is often seen as a hedge against inflation, higher interest rates tend to negatively impact the non-yielding bullion.
Investors now await the minutes from the Fed’s last meeting, due on Wednesday.
“Traders are going to be examining those minutes to see if they can glean any other clues for the trajectory of US monetary policy and any surprises that come out of those minutes would certainly be markets moving,” Wyckoff said.
Market participants are now pricing in about a 57 percent chance of a rate hike in September, according to the CME FedWatch Tool.
J.P Morgan said in a note on Friday that demand for gold from key sectors would not be as strong as it had expected, limiting the rise in gold prices this year to USD4,300/oz in the third quarter and USD4,500/oz in the fourth quarter.
Among other metals, spot silver dropped 1.2 percent to USD61.63 per ounce after hitting its highest since June 23 earlier.
Platinum fell 0.7 percent to USD1,626.10, and palladium slid 0.8 percent to USD1,264.16 per ounce.
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