Gold neared a nine-month low on Monday, weakening after strong U.S. job market data last week boosted the likelihood of another super-sized interest rate hike by the Federal Reserve.

Spot gold was down 0.3% at $1,736.63 per ounce by 1108 GMT. U.S. gold futures dipped 0.5% to $1,734.00. Losses in gold were, however, limited by growing pessimism over the state of some economies in Asia and geopolitical instability, Evangelista said, adding that bullion remains the go-to safe haven during times of trouble.

Looking at the technical picture, next key levels for gold can be found at $1,721.50 and $1,700, Otunuga said. Benefiting from the rate-hike bets, the dollar rose 0.6% to approach a 20-year peak hit in the previous session, dimming greenback-priced gold's appeal among overseas buyers.

"Gold has stumbled into the new week struggling to nurse deep wounds inflicted by an appreciating dollar and rising Treasury yields," said Lukman Otunuga, senior market analyst at FXTM. Rate hikes increase the opportunity cost of holding non-yielding bullion.

A strong labour market is considered an indicator of a healthy economy and gives the central bank more ammunition for another big hike, analysts said. Atlanta Fed President Raphael Bostic said on Friday he "fully" supports another 75-basis point rate hike at the Fed's next policy meeting later this month. Central banks in Canada and New Zealand are also expected to tighten policy further this week.

Losses in gold were, however, limited by growing pessimism over the state of some economies in Asia and geopolitical instability, Evangelista said, adding that bullion remains the go-to safe haven during times of trouble.

Among other precious metals, spot silver fell 0.4% to $19.22 per ounce, platinum slipped 2.2% to $877.13 and palladium dropped 2.1% to $2,136.60. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips and Aditya Soni)


Reuters