Gold prices edged lower on Tuesday, as traders stayed on the sidelines in advance of U.S. jobs data due later this week that could influence the timeline of when the Federal Reserve cuts back on its asset purchase program.
Spot gold fell 0.2% to $1,809.79 per ounce by 1:55 p.m. EDT, while U.S. gold futures settled 0.4% lower at $1,814.10.
Investors are looking forward to U.S. nonfarm payrolls data for July due on Friday, expected to see jobs increase by 880,000 after rising by 850,000 in June, according to a Reuters survey of economists.
"The market is fixated on when the Fed will taper and Friday's jobs number could determine how soon that may happen. The near-term outlook for gold is still bullish, but two robust nonfarm payroll reports could put a wrench in that theory," said Edward Moya, senior market analyst at OANDA.
Friday's report also comes after Fed Chair Jerome Powell last week said the job market still had "some ground to cover" before it could pull back its support to the economy, which pushed gold prices to a two-week high.
But two of the U.S. central bank's more hawkish policymakers said in recent days they believed the job market recovery is nearing completion, clearing the way for the Fed to begin tempering its support to the economy in a matter of months.
Analysts at TD Securities said in a note that gold's inability to benefit from "melting" real interest rates and fears over the Delta COVID-19 variant pointed to a lack of speculative interest, with a Fed that is still on track for a December taper.
Higher interest rates raise the opportunity cost of holding non-interest bearing gold.
Elsewhere, silver gained 0.3% to $25.52 an ounce, platinum dropped 0.7% to $1,049.28 and palladium slipped 0.9% to $2,652.38.