2023.02.0609:21:00UTC+00Gold Sees Modest Gains Despite Dollar Strength

Gold prices were seeing modest gains on Monday after ending significantly lower on Friday amid concerns that the Federal Reserve might keep hiking interest rates to cool inflation.

Spot gold rose 0.4 percent to $1,872.26 per ounce, while U.S. gold futures were up 0.4 percent at $1,884.30. Prices hit a more than four-week low earlier before reversing course to trade higher.

The dollar index held near a three-week high as a blockbuster U.S. jobs report and upbeat service sector data revived worries about the interest-rate outlook.

Non-farm payroll employment soared by 517,000 jobs in January while economists had expected an increase of 185,000 jobs. The jobless rate slipped to a multi-decade low of 3.4 percent from 3.5 percent.

U.S. service industries returned to growth in January but there were signs that pricing pressures may be easing.

Also boosting the safe-haven dollar was escalating tensions between the United States and China.

The Biden administration decided to postpone Secretary of State Antony Blinken's upcoming trip to China in response to the Pentagon's discovery of an alleged Chinese spy balloon, that was later shot down.

Beijing said it "is paying close attention to the development of the situation" and "reserves the right to make further necessary reactions".