Gold prices fell below $4,400 an ounce on Monday as stronger-than-expected U.S. employment data kept expectations for a Federal Reserve interest-rate increase elevated, while investors looked ahead to inflation figures due later this week.
At 02:34 ET (06:34 GMT), spot gold fell 0.8% to $4,396.29 an ounce, while gold futures declined 0.8% to $4,441.85.
Silver was also down 0.8% at $65.71 an ounce, while platinum declined 0.6% to $1,811.42. The U.S. Dollar Index was broadly unchanged at 99.07.
U.S. employment data shifts rate expectations
Gold extended its decline after falling 1% on Friday, taking the spot price back below $4,400.
U.S. employers added 162,000 jobs in August, exceeding expectations, while the unemployment rate remained unchanged. Following the report, markets were pricing in approximately a 60% probability of a Federal Reserve rate increase at its September 15-16 meeting.
Higher interest rates can increase the relative appeal of income-generating assets compared with gold, which does not pay interest.
The dollar strengthened on Friday. A stronger U.S. currency can also increase the cost of dollar-denominated gold for buyers using other currencies.
Gold ended last week at $4,429, down 0.6%, after trading above and below $4,400 as market expectations for Federal Reserve policy shifted.
Investors are now awaiting U.S. producer price data on Thursday and consumer price figures on Friday for further information on the inflation outlook and the potential path of interest rates.
Oil prices and Hormuz developments remain in focus
Developments in the Strait of Hormuz have also drawn attention to energy prices and their potential implications for inflation.
Iran said it targeted three oil tankers in the Strait of Hormuz, along with several vessels linked to the United States, in response to U.S. attacks on vessels over the weekend.
Brent crude was trading near $97 a barrel as markets assessed the potential impact of the latest developments on energy supplies.
Gold has traded within a relatively narrow range since rebounding from around $4,000 an ounce in July. The metal moved below its 200-day moving average, at approximately $4,526, last week.
Tony Sycamore, senior market analyst at IG, said the move had not changed his medium-term view that gold established a base around its late-June low of $3,942.
Sycamore continues to favour buying during price declines and expects gold eventually to move towards $5,000 an ounce.