Gold settled lower on Monday after a surprise surge in U.S. jobs growth reignited speculation the Federal Reserve could soon start scaling back its monetary stimulus program, denting bullion's appeal.
The U.S. central bank could start cutting back on its $85 billion monthly bond purchases as early as next month, analysts said. Some, however, expect the cutbacks will start next year.
An end to the Fed's quantitative easing program is expected to hurt assets such as gold, which has been boosted by central bank liquidity and low interest rates.
Spot gold hit its lowest since Oct. 17 at $1,278.94 an ounce in early trade, after losing 1.5 percent in the previous session, its biggest one-day fall in about a month. It was last down 0.5 percent to $1,283 an ounce.
U.S. gold futures for December delivery settled $3.50 lower at $1,281.10 an ounce.