Gold steadies as investors await US private payroll data

Gold prices held steady on Monday as the dollar hovered near a three-month high while traders awaited U.S. private payroll data for further cues on the Federal Reserve's monetary policy outlook.

Spot gold was up 0.1% at $4,008.34 an ounce by 1234 GMT. U.S. gold futures for December delivery rose 0.7% to $4,022.40.

The dollar index  hovered near a three-month high, making gold more expensive for buyers with other currencies.

"We are still in a consolidation mode. The lack of U.S. economic data makes it a bit more difficult, but weaker U.S. economic data should support further Fed rate cuts and allow gold to move to $4,200 per ounce by the end of the year," said UBS analyst Giovanni Staunovo.

Traders are now pricing in about a 70% chance of a Fed rate cut in December, according to CME's FedWatch Tool. Non-yielding gold thrives when interest rates are low and in times of economic uncertainty.

Investors have their eyes on ADP U.S. employment data and ISM PMIs this week, for indicators that could alter the Fed's hawkish stance.

China ended a long-standing tax exemption policy for some gold retailers on Saturday, potentially setting back a buying spree for the precious metal in the world's biggest consumer market.

UBS said it expects only a marginal impact on global gold prices from the new rule, citing strong investment and central bank buying.

Gold is seeing resistance between $4,000 and $4,050, and prices could see further downside if that holds, analysts at Heraeus said in a note.

"The price would need to climb above $4,155/oz to give an initial indication that a resumption of the rally had occurred," they added.

Reuters