Gold prices fell to a one-week low on Monday, as solid U.S. jobs data boosted expectations that the Federal Reserve will continue to deliver oversized interest rate hikes.
Spot gold was down 0.5 per cent at $1,686.55 per ounce, after hitting its lowest since Oct. 3. U.S. gold futures were down 0.8 per cent at $1,695.70.
The dollar index was steady after touching a one-week high on Friday. A stronger greenback makes gold costlier for buyers holding other currencies.
"Gold prices are taking their cue from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected U.S. job report," IG market strategist Yeap Jun Rong said, adding that gold prices seemed to remain locked in a downward trend for now.
Data showed on Friday U.S. job growth slowed moderately in September while the unemployment rate dropped, signalling a resilient economy and dousing hopes of a Fed pivot anytime soon.
Investors will now focus on the U.S. inflation data due later this week. Headline consumer price inflation is seen slowing a touch to an annual 8.1 per cent, but the core measure is forecast to accelerate to 6.5 per cent from 6.3 per cent.
While gold is often seen as a hedge against inflation, rising U.S. interest rates increase the opportunity cost of holding the non-yielding gold.
Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive U.S. monetary policy tightening.
Spot gold is expected to fall into a range of $1,660 to $1,674 per ounce, as it has more or less broken a support at $1,689, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 2.03 tonnes on Friday, marking its biggest outflow since late September.
Spot silver shed 1.9 per cent to $19.73 per ounce after hitting a one-week low. Platinum fell 0.6 per cent to $906.90, while palladium inched 0.1 per cent lower to $2,179.49.