Gold rose on Monday as the dollar weakened after a disappointing US jobs report pushed back expectations of a Federal Reserve rate rise to early 2016. Spot gold, was up 0.2 percent at$1,139.81 an ounce by 1333 GMT, having been lower earlier. "Gold's technical outlook continues to improve but we are at a critical level ...a break above $1,170 could indicate the selling is over and a break below $1,100 could signal we are going down to $1,000," Saxo Bank senior manager Ole Hansen said.
The metal had gained 2.2 percent on Friday, its biggest one-day rise since January 15, after data showed US employers slammed the brakes on hiring over the last two months. Non-farm payrolls rose by only 142,000 last month, below economists' expectations of 203,000. Gold, a non-interest-paying asset, had been weighed down all year by expectations the US central bank could soon raise rates and is still down nearly 4 percent this year. Higher rates would increase the opportunity cost of holding the metal.
"The interest rate rise is the mechanism by which the (US jobs data) is being rated but the real issue is whether the US economy is slowing," Macquarie analyst Matthew Turner said. "However, other indicators, such as car sales were strong, and we need more evidence on that one before we can come to a conclusion and gold's support could be short lived."
The Fed refrained from raising rates at its last policy meeting in September, citing weakness in the global economy and volatility in financial markets. Hedge funds and money managers increased bullish bets on COMEX gold futures and options to a four-week high but cut a silver net long position in the week to September 29, US Commodity Futures Trading Commission data showed on Friday.
Silver had also rallied with gold, gaining 5.4 percent on Friday, its sharpest rise since December 2014. On Monday, the metal hit its highest in nearly 3 months at $15.69 an ounce, before trading up 2.2 percent at $15.58. Platinum was trading up 1.7 percent at $920.74, after hitting a near-seven-year-low of $888 in the previous session. Expectations of lower demand after revelations last month that Volkswagen falsified US vehicle emission tests, which some believe could affect demand for diesel cars, hit platinum prices. The metal is widely used in auto catalysts, particularly for diesel engines. The metal is trading at its smallest premium to palladium since 2001. Palladium rose 2 percent to $710.50 an ounce, its highest since June, boosted by hopes that demand for gasoline cars, where the metal is used in catalysts, could increase.