The price of gold edged modestly up on Monday, snapping an eight-day losing streak as the dollar retreated, but still hovered near its lowest in three months after robust U.S. jobs data boosted expectations of a U.S. rate hike in December.
"Until the Fed rate hike, there is going to be continued concern about where is the floor for gold, whether at current levels or significantly lower," ING Bank senior strategist Hamza Khan said.
U.S. data on Friday showed employers outside the farming sector added 271,000 jobs in October, well above expectations and the most in 10 months, while the jobless rate fell to a 7-1/2-year low of 5 percent.
As a result, investors raised their bets that the first U.S. rate increase in nearly a decade will come next month, sending non-interest-paying gold to $1,084.90 an ounce on Friday, the lowest since August.
"This back-and-forth on expectation of what the Fed will do is going to keep the market busy in the short term at least," Julius Baer analyst Carsten Menke said.
"We really have to concentrate on whether growth is sound in the U.S. (but) we are not going to have an inflation problem, so from that perspective, there is no investment case to be done for gold."
Following the jobs report, futures markets were pricing in a 70 percent probability of a December rate hike, up from 58 percent before the data.
Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 0.4 percent to 669.09 tons on Friday, the lowest in nearly three months, as investors exited bullion.
The industrial precious metals were pressured by a fresh batch of disappointing Chinese trade data, which could signal slower demand, as well as outflows from PGM-backed exchange-traded funds.
"For the most part, it's just a much weaker PGM complex in general, reacting to the Fed last week and the strong jobs number on Friday," said one U.S. trader.
"Coupled with some of the ETF liquidation, we're just skipping along the bottom."
Palladium fell 4.3 percent to $592.50 an ounce, its lowest in seven weeks, after last week's biggest weekly fall since September 2011.