Gold succumbs to profit-taking after US jobs data-fuelled rally

Gold prices slipped on Monday as investors booked profits after a sharp rise in the previous session following weaker-than-expected U.S. jobs data that boosted expectations for a Federal Reserve interest rate cut in September.

FUNDAMENTALS

* Spot gold lost 0.3% to $3,351.80 per ounce as of 0055 GMT. Bullion had risen more than 2% on Friday. However, U.S. gold futures gained 0.2% to $3,404.80.

* The dollar index fell 0.5% against a basket of rivals, making gold more affordable for holders of other currencies. Meanwhile, the benchmark 10-year yield languished near a five-week trough.

* A weaker than expected U.S. employment growth in July and a downward revision of 258,000 jobs in the May and June non-farm payrolls signalled a sharp deterioration in labor market conditions and revived hopes of a Fed rate cut in September, with markets now pricing in a 90% chance, per CME FedWatch tool.

* Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment. * SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 953.08 tonnes on Friday from 954.51 tonnes on Thursday. * Demand for physical gold in key Asian markets improved slightly last week as a pullback in prices sparked buying interest, though volatility kept some buyers cautious.

* Asian markets tracked Wall Street lower as fears for the U.S. economy returned with a vengeance, prompting investors to price in an almost certain rate cut in September and undermining the dollar.

* Spot silver fell 0.5% to $36.83 per ounce, platinum slipped 0.6% to $1,307.25 and palladium dipped 1.6% to $1,189.27. DATA/EVENTS (GMT) 1400 US Factory Orders MM June.