Gold settled lower on Monday as a short-covering rally that boosted prices from 4-1/2-year lows lost steam, with buyers still wary that rising stock markets, upbeat U.S. data and softening investment flows would spell further falls.
The metal rebounded from an early low of $1,131.85 an ounce on Friday after U.S. payrolls data marginally missed expectations. Prices jumped 3.1 percent, their biggest one-day rise since June 19.
That move petered out early on Monday. U.S. gold futures for December delivery closed the session $10.00 lower at $1,159.80 an ounce. , meanwhile, was down more 2.2 percent at $1,153 an ounce.
"I don't see a reason why gold prices would continue going up - there are more reasons for prices to go down,'' Natixis analyst Bernard Dahdah said, citing expectations for more strength in the dollar and rising U.S. interest rates.
"By the end of the year, we think it'll be below $1,200, and probably $1,150.''
Investment interest in gold has been lacklustre, as firmer equities detracted interest from the metal. A deal giving global investors easier access to China's stock market lifted world shares to their highest in over a month on Monday.
Hedge funds and money managers slashed bullish bets in gold futures and options to a four-week low after prices tumbled, data showed on Friday.
The largest gold-backed exchange-traded fund, SPDR Gold Shares, said its holdings fell 5.7 tons on Friday, its biggest one-day outflow in nearly three weeks. October saw its biggest monthly outflow this year.
``The market still looks vulnerable,'' Simon Weeks, head of precious metals at Bank of Nova Scotia, said. ``There are a lot of people who'd prefer to see positive economic data, equities higher, ETFs lower, and I don't think anything's going to change that in the short term.''