Gold prices fell to a one-week low on Monday, as solid US jobs data boosted expectations that the Federal Reserve will continue to deliver oversized interest rate hikes.
Spot gold was down 0.5% at $1,686.55 per ounce, as of 0623 GMT, after hitting its lowest since Oct. 3. US gold futures were down 0.8% at $1,695.70.
The dollar index was steady after touching a one-week high on Friday.
A stronger greenback makes gold costlier for buyers holding other currencies.
“Gold prices are taking their cue from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected US job report,” IG market strategist Yeap Jun Rong said, adding that gold prices seemed to remain locked in a downward trend for now.
Data showed on Friday US job growth slowed moderately in September while the unemployment rate dropped, signalling a resilient economy and dousing hopes of a Fed pivot anytime soon.
Investors will now focus on the US inflation data due later this week.
Headline consumer price inflation is seen slowing a touch to an annual 8.1%, but the core measure is forecast to accelerate to 6.5% from 6.3%.
While gold is often seen as a hedge against inflation, rising US interest rates increase the opportunity cost of holding the non-yielding gold.
Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive US monetary policy tightening.
Spot gold is expected to fall into a range of $1,660 to $1,674 per ounce, as it has more or less broken a support at $1,689, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 2.03 tonnes on Friday, marking its biggest outflow since late September.
Spot silver shed 1.9% to $19.73 per ounce after hitting a one-week low.
Platinum fell 0.6% to $906.90, while palladium inched 0.1% lower to $2,179.49.