Gold prices were little changed on Monday, failing to gain support from a weaker dollar as investors digested sharp losses in the previous session and worried about further US rate hikes. Spot gold rose 0.1 percent at $1,259.20 an ounce by 1:51 pm EDT (1751 GMT), having on Friday touched its lowest in just under two weeks at $1,254 an ounce and registering its first weekly decline in four.
US gold futures for December delivery settled up 0.01 percent at $1,264.70. The dollar edged lower, as investors consolidated bets before inflation data this week that may signal a turnaround in the currency's weakness this year. Usually a weaker dollar supports commodities such as gold that are priced in the greenback, lowering the cost for buyers outside the United States.
Many investors, however, seemed wary of the upcoming data following unexpectedly strong jobs numbers on Friday, traders said. "We think the jobs report was good enough for the Fed to move but the market remains skeptical that they're going to get much of a rate increase this year," said Rob Haworth, senior investment strategist at US Bank Wealth Management. "Bond investors in particular are not at all convinced, nor concerned, about inflation pressures, which has been part of the equation for Fed rate increases."
In coming weeks gold may get a boost if US politicians opt for a "clean" raising of the debt ceiling, without linking it to spending or tax provisions, said analyst Tom Kendall at ICBC Standard Bank. The Fed can leave interest rates where they are for now because inflation is not likely to rise much even if the US job market continues to improve, St. Louis Fed President James Bullard said on Monday.
Also eroding support for gold on Monday was a broad measure of equity markets across the world that climbed to a record high, boosted by gains in Asia, while US and European markets were little changed. Silver rose 0.1 percent to $16.25 per ounce, after falling to $16.10, a low since July 20.
Platinum rose 0.4 percent to $963.20 per ounce, after gaining 3.3 percent last week, its biggest weekly gain since early January. Palladium added 0.9 percent to $884.47 per ounce after touching $866, its weakest since July 27. Palladium has surged 28 percent this year due to a combination of some regional shortages and speculative flows, Kendall said.
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