Spot gold slid 0.2% to $2,647.49 per ounce and US gold futures were flat at $2,667.10
Gold prices dropped on Monday as bets firmed for a smaller US rate cut in November after strong jobs data, while investors awaited inflation data and comments from Fed officials for further cues.
Spot gold slid 0.2% to $2,647.49 per ounce by 0432 GMT. US gold futures were flat at $2,667.10.
The stronger-than-expected September jobs report, released on Friday, poured cold water on expectations of a big Fed rate cut next month, strengthening the dollar.
Traders now see a 98% chance that the Federal Reserve will lower rates by only a quarter of a percentage point next month.
Geopolitical risks in the Middle East could support safe-haven flows for the yellow metal, which limit the downside from a less-dovish market rate pricing, according to IG market strategist Yeap Jun Rong.
Bullion tends to be a preferred investment in a low interest rate environment and during political and economic uncertainties.
This week, market participants will focus on minutes of the Federal Reserve’s last policy meeting, and the US Consumer Price Index and Producer Price Index data. A number of US central bank officials are also speaking this week.
In China, the central bank held back on buying gold for its reserves for a fifth consecutive month in September.
With gold prices near record highs, China may hold back on further accumulation in the short-term but the wider trend to load up on the metal could continue due to its sensitive relations with the West and a desire to diversify away from the US dollar, Yeap added.
Spot silver dropped 0.2% to $32.11, platinum shed 0.4% to $983.67 and palladium gained 0.6% to $1,017.63.
