Gold prices fell on Monday as investors took profits after prices hit a seven-week high in the previous session, while markets awaited US inflation data for fresh clues on the path of interest rates at the US Federal Reserve.
Gold fell 0.3% to $4,330.46 an ounce in spot trading by 04:43 GMT. Prices touched their highest level since June 17 in the previous session, following weak US non-farm payrolls data.
U.S. gold futures fell 0.2% to $4,390.60.
Tim Waterer, a market analyst at KCM Trade, said that gold is retreating slightly as it experiences some profit-taking after the strong gains it made last week, supported by the non-farm payrolls data. He noted that this retreat appears to be a natural stabilization rather than a significant shift in market sentiment, and he expects gold to remain supported above the $4,300 level in the near term.
The data showed that the US economy unexpectedly lost jobs in July, while previously reported job figures for the past two months were revised sharply downward.
Futures markets then reversed the probability of an interest rate hike at the Federal Open Market Committee meeting on September 15 and 16, from a probability exceeding 50% to a lower probability.
Lower interest rates make gold more attractive compared to income-generating assets, since the precious metal does not generate a return.
Key US data releases scheduled for this week include the Consumer Price Index on Wednesday and the Producer Price Index on Thursday.
Waterer said the weak readings would strengthen the case for keeping interest rates unchanged and pave the way for further gains in gold, adding that uncertainty in the Middle East remains a risk factor, as any renewed escalation that pushes oil prices higher could quickly put pressure on the metal.
On the geopolitical front, Iran said it is nearing a final agreement with Oman to establish new shipping lanes between them through the Strait of Hormuz, but reiterated that the United States must meet several conditions before this strategic waterway can be reopened.
As for other precious metals, silver rose 0.3% in spot trading to $63.77 an ounce, platinum gained 0.2% to $1,748.80, while palladium fell 1% to $1,364.55.
