Gold prices tepid as U.S. jobs data lifts Fed rate-hike bets

Gold prices ticked lower on Monday, having shed nearly 1% in the previous session, as strong U.S. jobs data cemented the view that the Federal Reserve would continue its policy of aggressive interest rate hikes.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,693.19 per ounce, as of 0100 GMT, while U.S. gold futures were down 0.4% at $1,703.4.


* The dollar index was steady, having touched a one-week high on Friday, dimming gold's appeal for overseas buyers.

* U.S. job growth slowed moderately in September while the unemployment rate dropped to 3.5%, pointing to a tight labour market, which keeps the Fed on its aggressive monetary policy tightening campaign for a while.

* Rising U.S. interest rates increase the opportunity cost of holding the non-yielding gold, while boosting the dollar, in which the precious metal is priced.

* New York Federal Reserve President John Williams said on Friday the U.S. central bank has more work to do to lower inflation and rebalance economic activity in a more sustainable way, and he warned that the unemployment rate will most likely rise as part of that process.

* Focus will now be on U.S. inflation data due on Thursday.

* Data on Friday showed inflation's tightening stranglehold on the German economy, with a surge in import prices and drop in industrial output and retail sales adding to signs that Europe's biggest economy is heading for recession.

* Physical gold prices flipped to a discount in India last week as elevated local rates amid a dive in the rupee dampened festive demand, with higher prices playing spoilsport across other Asian hubs as well.

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.21% to 944.31 tonnes on Friday.

* Spot silver fell 1.7% to $19.76 per ounce, platinum was down 0.8% at $905.20 and palladium was steady at $2,182.44.