Gold prices slipped on Monday as the dollar firmed after a strong U.S. payrolls report, overshadowing support from prospects that the Federal Reserve would pause its rate hikes this month.
Spot gold was down 0.4% at $1,939.19 per ounce, as of 0803 GMT, hovering near its lowest levels since May 30. U.S. gold futures shed 0.8% to $1,954.40.
Gold prices dropped more than 1% on Friday after data showed U.S. nonfarm payrolls rose by 339,000 jobs last month, exceeding a 190,000 forecast by economists polled by Reuters. But the unemployment rate surged to a seven-month high of 3.7% from a 53-year low of 3.4% in April.
The higher unemployment reading prompted markets to price in a 79.3% chance of the Fed leaving interest rates unchanged at its June 13-14 meeting, according to the CME FedWatch Tool.
"Money markets continue to favour a pause (as did comments from Fed vice chair nominee Philip Jefferson), so it may limit the downside for gold even if it has lost some safe-haven flows from debt-ceiling concerns... The question now is whether (gold) will break support at $1,934 to bring $1,900 into focus," City Index senior market analyst Matt Simpson said.
Non-interest-bearing bullion tends to become less attractive in a high-interest rate environment.
The U.S. House of Representatives last week passed a bill to suspend the $31.4 trillion debt ceiling and averted a first-ever default.
The dollar index rose 0.2%, making greenback-priced bullion less affordable for overseas buyers.
Most Asian stock markets extended a global rally on Monday, while oil prices jumped after Saudi Arabia pledged big output cuts.
According to Reuters technical analyst Wang Tao, gold might revisit its May 30 low of $1,931.76.
Spot silver lost 0.8% at $23.40 per ounce, platinum edged up 0.1% to $1,004.66 per ounce and palladium gained 1% to $1,434.61.
(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips, Rashmi Aich and Sohini Goswami)