By Nithin ThomasPrasad
Gold held steady near two-week lows on Monday, with the dollar remaining supported by expectations of monetary tightening in the United States following stronger-than-expected jobs data last week.
"The job data was very good; gold is pressured," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
"There is not much other geopolitical uncertainty in the world, no extreme events. That's why risk-aversion is subsiding and gold prices aren't doing well."
Gold is used as an alternative investment during times of political and financial uncertainty.
Spot gold was nearly flat at $1,257.51 per ounce at 0706 GMT. On Friday, it touched its lowest in just under two weeks at $1,254 an ounce and registered its first weekly decline in four.
U.S. gold futures for December delivery fell 0.1 percent to $1,263.10 per ounce.
Asian stocks advanced on Monday, taking their cue from Wall Street, while the dollar moderated but retained most gains made on stronger-than-expected July jobs growth and the promise of a U.S. tax plan that will repatriate corporate profits.
A stronger dollar makes bullion more expensive for holders of other currencies, while higher interest rates lead to increased bond yields and dampen demand for non-yielding gold.
U.S. employers hired more workers than expected in July and raised their wages, signs of labour market tightness that likely clear the way for the Fed to announce a plan to start shrinking its massive bond portfolio.
"Investors were quick to liquidate some long positions with market pricing of another rate hike by the Fed rising slightly as a consequence," said ANZ Research in a note.
"However, the losses were limited, suggesting investors are not completely convinced."
Spot gold may retest support at $1,255 per ounce, a break below which could cause a further loss to the next support at $1,247, according to Reuters technical analyst Wang Tao.
"We think gold is going to trade in a very tight range because of the low level of liquidity in the market due to the holidays (in Asia)," said Xu.
In other precious metals, silver rose 0.1 percent to $16.24 per ounce, having retouched Friday's over two-week low of $16.17 an ounce earlier in the session.
Platinum was nearly flat at $959.70 per ounce, after hitting its highest since late April at $970.10 in the previous session. It gained over 3.2 percent last week, its highest since early January.
Palladium rose 0.1 percent to $877.40 per ounce.
(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Richard Pullin and Joseph Radford)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)