Bargain hunters keep gold steady, eye US jobs data

Spot gold was little changed at $1,323 per ounce and US gold futures were flat at $1,326.90

Gold held steady on Tuesday as investors swooped in after the metal fell to near five-week lows, while markets wait to see how US nonfarm payroll data due later this week will play into the timing of any rate hike.

"Prices have held up very well. They certainly seem to be supported around this level despite rising expectations of a rate hike," said ANZ analyst Daniel Hynes.

"While we have seen some outflows from exchange traded funds, investors are relatively happy to hold gold considering the environment of low interest rates and negative yield," Hynes said.

Spot gold was little changed at $1,323 per ounce at 0407 GMT. The metal had recovered from a near five-week low of $1,314.70 after a dollar run lost some steam late Monday.

US gold futures were flat at $1,326.90

Federal Reserve Chair Janet Yellen said on Friday the case for "an increase" in the policy rate has strengthened in recent months due to improvements in the labor market and expectations for solid economic growth.

Friday's nonfarm report for August, as well as other data, could reinforce hawkish messages from Yellen and other Fed officials.

Employers are expected on Friday to show 180,000 job gains in August, according to the median estimate of 89 economists polled by Reuters, below the better-than-expected 255,000 additions in July and 292,000 gains in June.

"Gold may be especially sensitive to that (jobs data) release should the data be seen as likely to influence the timing of a future interest rate hike," HSBC analyst James Steel said in a note.

"Other upcoming data will detail personal consumption, consumer confidence, car sales, and factory activity, and may also influence gold."

US consumer spending increased for a fourth straight month in July amid strong demand for automobiles, pointing to a pickup in economic growth that could pave the way for the Fed to raise interest rates this year.

Gold is highly-sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

Spot gold still targets $1,308 per ounce, as suggested by a Fibonacci ratio analysis and its wave pattern, according to Reuters technical analyst Wang Tao.

The dollar index, which tracks the greenback against a basket of six rivals, was up 0.1 per cent at 95.692.

Silver fell 0.6 per cent to $18.84 an ounce. It hit a two-month low of $18.36 on Monday.

Platinum and palladium were little changed at $1,071.60 and $695.08, respectively.