Spot gold fell 0.3% to $1,827.60 per ounce by 0546 GMT. U.S. gold futures rose 0.6% to $1,830.60.
On Monday, the rupee had breached the 78/$ mark and hit a record low of 78.28/$ intraday.
Spot gold fell 0.4% to $1,811.80 per ounce by 12:33 p.m. EDT (1633 GMT), while U.S. gold futures slipped 1% to $1,813.40.
Spot gold rose 0.3% to $1,823.49 per ounce by 0932 GMT, after falling to its lowest since May 19 at $1,810.90 earlier in the session.
The yield on the three-year government bond declined 9 bps, while the five-year bond yield dropped 7 bps
Spot gold was up 0.1% at $1,851.98 per ounce, as of 0752 GMT, while US gold futures rose 0.2% to $1,854.60.
The European Central Bank meets on Thursday, though it is not expected to begin raising interest rates until July, with rate setters at the US Federal Reserve and Bank of England gathering next week
The rupee appreciated 4 paise to 77.62 against the US dollar in opening trade on Monday, supported by a weak American currency in the overseas markets.
"(The job data) is really raising the recession concerns that have been brewing in the market and supporting gold," said Ryan McKay, commodity strategist at TD Securities
The currency has slumped more than 45 this year amid concern the RBI is behind the curve in tackling inflation, with elevated crude oil prices adding to pressures on the net
A stronger dollar makes bullion more expensive for buyers holding other currencies, while gains in benchmark US 10-year Treasury yields reduce the appeal of zero-yield gold.
The U.S. dollar strengthened following hawkish comments by a senior Federal Reserve official causing gold to retreat, Ricardo Evangelista, senior analyst at ActivTrades said in a note.
The dollar index - which tracks the greenback against six major rivals - is on track for its first monthly drop in five, as the safe haven currency loses steam after a breakneck start to the year.
Early in the Asia session the dollar was a fraction weaker on the euro at $1.0728, just above a five-week low, having dropped about 1.5% on the common currency last week
Benchmark 10-year note yields were down on the day, after briefly rising on strong spending data, while the dollar was headed for a second consecutive week of declines.
The dollar index, which measures the safe-haven currency against a basket of six other major currencies, fell as low as 101.43, its weakest since April 25.
"The market's tentative speculation about a pause in the Fed's tightening cycle in September is surely contributing to keeping the dollar soft," ING strategists said
Against a basket of its rivals, the dollar fell 0.3% to 101.79, its lowest level since April 26
At the interbank forex market, the domestic unit opened at 77.69 against the US dollar. It moved in a range of 77.51 to 77.69 during the session
The dollar slumped 1% as investors kept up selling pressure, cutting bets on further dollar gains from rising U.S. rates. A weaker dollar makes gold cheaper for overseas buyers. [USD/]