Spot gold was down 0.9% at $1,990.69 per ounce, as of 0402 GMT. U.S. gold futures slipped 1% to $2,006.30.
Gold slid due to "profit-booking on expectations of Fed rate hikes followed by Friday's strong U.S. job growth report and a steady dollar," Hareesh V, head of commodity research at Geojit Financial Services, said while noting a technical correction in prices.
The dollar index was 0.1% higher, making bullion expensive for overseas buyers. [USD/]
Friday's data from the U.S. Labor Department showed non-farm payrolls increased by 236,000 jobs in March, versus expectations of 239,000. The data also showed the unemployment rate dipped to 3.5% from 3.6% in the prior month.
The report raised bets that the U.S. central bank would increase rates next month, with markets pricing in a 66% chance of a 25 basis-point (bps) rate hike, according to the CME FedWatch tool.
But "the short-term outlook remains bullish for gold. As long as prices stay above $1,920 there are chances for the bullish outlook to continue," Geojit's Hareesh added.
Gold is traditionally considered a hedge against inflation, but higher rates increase the opportunity cost of holding the non-yielding asset.
"The bull trend, established since November 2022, is still intact," metals firm MKS PAMP said in a note but added a "stickier" core U.S. CPI on Wednesday would solidify a 25 bps hike and ensure, unless there's a new catalyst, gold prices might not hit all-time highs this month.
Spot silver shed 1% to $24.75 per ounce, platinum lost 0.5% to $1,002.35 and palladium fell 0.3% to $1,461.31.
Australia, Hong Kong and some European markets are closed on Monday for the Easter holidays.
(Reporting by Kavya Guduru in Bengaluru; editing by Uttaresh Venkateshwaran)
By Kavya Guduru
