Gold steadied on Tuesday as the dollar eased after a poor US jobs number last week rattled markets, raising doubts over a Federal Reserve rate rise this year.

Spot gold ticked up 0.2 per cent to $1,137.45 an ounce by 1011 GMT. Prices rose to a one-week high above $1,140 in the previous session, supported by a weaker dollar.

The metal is still largely holding on to Friday’s 2.2 per cent jump, the biggest one-day rise since January 15 following data that showed US employers had slammed the brakes on hiring over the last two months.

“The Fed is worried about the implications of continuing low inflation or even outright deflation because of low oil prices, but a December rate hike is still possible,’’ Mitsubishi Corp strategist Jonathan Butler said.

“And assuming that we see a rate lift-off in December, the short-term outlook for gold is not bullish.’’

The dollar was down 0.2 per cent against a basket of currencies and European shares fell after poor economic data.

Markets believe signs of sluggishness in the US economy, along with weakness in China and volatility in financial markets, could prompt the Fed to hold rates.

Higher rates would increase the opportunity cost of holding gold. The non-interest-paying asset, which has benefited from years of ultra-low US rates, has fallen nearly 4 per cent this year on expectations that the Fed will move to increase rates for the first time in nearly a decade.

After last week’s soft jobs report, data on Monday showed the pace of growth in the US services sector decelerated in September as new orders and business activity slowed.

SPDR Gold Trust, the top gold-backed exchange-traded fund, saw a small outflow of 0.22 tonnes on Monday. That is the fund’s first outflow in two weeks.

Among other precious metals, silver was up 0.2 per cent at $15.67, near a three-month high of $15.71 hit on Monday. It has gained nearly 8 per cent in the last two sessions.

Platinum rose 0.5 per cent to $916.75 an ounce, having hit a near seven-year low of $888 on Friday. Palladium was up 0.5 per cent at $694, after hitting its highest since June at $710.50 in the previous session on expectations that demand for gasoline cars, where the metal is used in catalysts, would rise due to the Volkswagen diesel engine emissions scandal.

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