Gold prices nudged lower on Monday as strong U.S. jobs data reinforced expectations for higher interest rates, while market participants awaited key U.S. inflation prints due later this week for further clarity on the Federal Reserve's policy path.
Spot gold was down 0.5% at $4,405.47 per ounce, as of 0211 GMT, after falling 1% on Friday.
U.S. gold futures for December delivery were down 0.5% at $4,452.20.
Data on Friday showed U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, suggesting an improvement in the labour market after recent struggles and keeping a rate increase this month on the table.
U.S. producer price index (PPI) data is due on Thursday, followed by consumer price index (CPI) data on Friday.
"The jobs number delivered a clear upside surprise and put some pressure on the metal, but it wasn't a complete slam dunk for a September rate hike. The real missing piece of the puzzle arrives this week with U.S. CPI," said Tim Waterer, chief market analyst at KCM Trade.
"A strong inflation print would reinforce expectations of a Fed hike, lift yields further and weigh more heavily on gold." [US/]
Traders are pricing in a 58.4% chance of a rate hike at the Fed's September 15-16 meeting, CME's FedWatch tool showed.
While gold is typically viewed as an inflation hedge, higher interest rates tend to weigh on the appeal of non-yielding bullion.
U.S. President Donald Trump said on Friday that unless the Fed cuts interest rates, he would stop trading with countries with which the United States had a deficit.
On the Middle East front, Iran said it will step up efforts to tackle problems created by U.S. sanctions that are crippling its economy, while a senior Iranian official warned of a "painful response" if it comes under further attack.
Among other metals, spot silver eased 0.2% at $66.03 per ounce, platinum lost 0.8% at $1,805.53 and palladium declined 0.7% to $1,396.08.
