Gold dips after rallying on US jobs data

Gold slipped nearly 1% early on Monday after a short covering rally in the previous session, fuelled by a softer-than-expected US jobs report, showing that the metal was still not out of the woods.

Despite a 3% jump on Friday, gold remained below a key $1,180-an-ounce level that could pressure the metal back to 4-1/2-year lows reached last week on a strong dollar and fears regarding an upcoming rate hike by the US Federal Reserve.

Fundamentals

* Spot gold fell as much as 0.9% to $1,168.10 before recovering slightly to trade down about $8 at $1,170.67 by 0045 GMT.

* On Friday, gold fell to $1,131.85 - its lowest since April 2010 - before recovering to post its biggest one-day gain in five months.

* Gold got a boost after US nonfarm payrolls increased 214,000 in October versus a projected 231,000, hurting the dollar and boosting the metal's appeal as a hedge. But details of the report were solid with the unemployment rate dipping to a fresh six-year low of 5.8% even as more people entered the work force.

* The jump also followed earlier sharp losses in the week as speculators covered their short positions.

* However, investor positions show that the sentiment towards bullion remains bearish and the metal could plumb new lows before the end of the year.

* Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.78 percent to 727.15 tonnes on Friday - its lowest in six years.

* Hedge funds and money managers slashed their bullish bets in gold futures and options to their lowest in four weeks, the Commodity Futures Trading Commission said on Friday.

* Gold's rout may be far from over, with many analysts and traders surveyed by Reuters predicting prices could fall to $1,000 per ounce by the end of the year for the first time since 2009.

* In other market news, the curtain came down on nearly a century of tradition for bullion markets on Friday when U.S. bourse Intercontinental Exchange was named as provider of an electronic benchmark gold price to replace the twice daily "fix".

* Calling time on London's century-old gold fix could mark the beginning of an even wider industry overhaul that may ultimately dilute the dominance of the highly profitable bilateral over-the-counter trading.

Market News

* The dollar hovered below a four-year peak on Monday, having lost a bit of altitude late last week after US jobs data fell short of expectations, prompting some investors to take profits on extremely long positions.