Gold held steady after hitting its highest in over six weeks on Monday, buoyed by disappointing US jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States. US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labour market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.
Spot gold had climbed 0.1 percent to $1,280.90 per ounce by 0805 GMT. It hit a peak of $1,282 an ounce early in the session, its strongest since April 21. US gold futures for August delivery were up 0.3 percent at $1,283.4 an ounce.
"We do expect gold to hit some turbulence as we approach the June Fed rate hike, but things could open up for the precious metal post-meeting if the central bank's language remains dovish," INTL FCStone analyst Edward Meir said in a note Higher interest rates put pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. "We had an excellent Friday where gold really reacted. It is taking a pause in Asian trading this morning," said ANZ analyst Daniel Hynes referring to the 1.1-percent jump in prices for the metal prices in the previous session.
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