Gold prices fell on Monday as fading expectations of an early rate cut in the U.S. kept the dollar and bond yields supported, ahead of a key inflation print due later this week.

Spot gold was down 0.4% to $2,037.39 per ounce, as of 0342 GMT. U.S. gold futures fell 0.3% to $2,043.60 per ounce.

Trading was thin in Asia, with the Japanese market closed for a holiday.

“I think we’re seeing some follow through from the strong jobs data. It’s all tied back to cooling off of expectations for rate cuts this year,” said Kyle Rodda, a financial market analyst at Capital.com.

The dollar index was up 0.1%, after marking its best week since July 2023 on Friday, making bullion more expensive for other currency holders, while benchmark U.S. 10-year Treasury yields, held above 4%.

U.S. employers hired more workers than expected in December, official data showed, but separate data from the Institute for Supply Management (ISM) indicated that the services sector slowed considerably last month.

Gold prices little changed as US payrolls loom

Market participants are pricing in an about 64% chance of a rate cut by the U.S. central bank in March, down from a nearly 90% probability seen before the New Year, according to the CME FedWatch tool.

However, things still look constructive in the near term, but the retracement in gold prices might have a little bit more left into it, said Rodda.

On the technical front, spot gold may fall into a range of $2,028-$2,035 per ounce, according to Reuters technical analyst Wang Tao.

Investors now await Thursday’s U.S. consumer price inflation report for further direction on the Federal Reserve’s pace and scale of rate cuts.

Spot silver was down 0.6% at $23.01 per ounce, and platinum fell 0.6% to $954.77. Palladium lost 0.7% to $1,020.25, its tenth session of slide.