Gold prices fell further on Monday to hover near a four-month low as the dollar rallied after the release of strong U.S. labor data.
Spot gold was down 1.1 percent at $1,743.26 per ounce in European trade, after having slumped below $1,700 in early Asia trade. U.S. gold futures were down about 1 percent at $1,745.10.
The dollar hit a four-month high against the euro as strong U.S. jobs data released on Friday bolstered expectations for early tapering of economic support.
The Labor Department released a report showing non-farm payroll employment spiked by 943,000 jobs in July after surging by an upwardly revised 938,000 jobs in June.
Economists had expected employment to jump by 870,000 jobs compared to the addition of 850,000 jobs originally reported for the previous month.
The stronger than expected job growth was partly due to sharp increases in employment in leisure and hospitality and local government education, which shot up by 380,000 jobs and 221,000 jobs, respectively.
Reflecting the strong job growth, the unemployment rate slid to 5.4 percent in July from 5.9 percent in June, falling to its lowest level since March of 2020. Economists had expected the unemployment rate to dip to 5.7 percent.
Last week, Federal Reserve Chair Jerome Powell indicated further progress was needed in labor market recovery before the central would consider scaling back stimulus.
The dollar’s spike makes gold more expensive for holders of other currencies. The outlook for U.S. monetary policy might be affected by the latest U.S. inflation data and six speeches from Federal Reserve officials scheduled for this week.