Gold edged lower on Monday after posting its biggest rally in more than three years in the previous session, when dismal US jobs data fuelled speculation about further monetary easing and burnished gold's appeal as a hedge against inflation. The surprisingly weak US employment data added to the gloom over the global economy, just as the eurozone appears to be sinking deeper into the debt crisis and China's growth slows.
Gold broke ranks with riskier assets on Friday and rose more than 4 percent, propped up by rekindled expectations of further monetary easing by the US Federal Reserve. Some Asian investors, however, were less than convinced that the Fed would implement monetary easing soon, and were selling at the higher prices to lock in profits.
"People are still not sure where things may go and have been selling after prices jumped," said a Singapore-based dealer. Spot gold edged down 0.4 percent to $1,619.80 an ounce by 0718 GMT. It had fallen to as low as $1,614.59 earlier in the session. US gold futures contract for August delivery was little changed at $1,621.40. The London financial markets are closed on Monday and Tuesday for a public holiday. Bullion fell more than 6 percent in May, under the weight of a dollar that rallied more than 5 percent versus a basket of currencies as investors piled into the greenback, US Treasuries and German Bund during a deepening euro zone crisis. Spot silver lost 1 percent to $28.34, after rallying 3.6 percent on Friday - its biggest one-day rise in more than three months.
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