Gold slipped nearly 1 per cent early on Monday after a short-covering rally in the previous session, fuelled by a softer-than-expected US jobs report, showing that the metal was still not out of the woods.

Despite a 3 per cent jump on Friday, gold remained below a key $1,180-an-ounce level that could pressure the metal back to 4-1/2-year lows reached last week on a strong dollar and fears regarding an upcoming rate hike by the US Federal Reserve.

Spot gold

Spot gold fell as much as 0.9 per cent to $1,168.10 before recovering slightly to trade down about $8 at $1,170.67 by 0045 GMT.

On Friday, gold fell to $1,131.85 — its lowest since April 2010 — before recovering to post its biggest one-day gain in five months.

US non-farm payrolls data

Gold got a boost after US non-farm payrolls increased 214,000 in October versus a projected 231,000, hurting the dollar and boosting the metal’s appeal as a hedge.

But details of the report were solid with the unemployment rate dipping to a fresh six-year low of 5.8 per cent even as more people entered the work force. The jump also followed earlier sharp losses in the week as speculators covered their short positions.

However, investor positions show that the sentiment towards bullion remains bearish and the metal could plumb new lows before the end of the year.

Holding in SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.78 per cent to 727.15 tonnes on Friday — its lowest in six years.

Hedge funds and money managers slashed their bullish bets in gold futures and options to their lowest in four weeks, the Commodity Futures Trading Commission had said on Friday.

Gold’s rout may be far from over, with many analysts and traders surveyed by Reuters predicting prices could fall to $1,000 per ounce by the end of the year for the first time since 2009.

In other market news, the curtain came down on nearly a century of tradition for bullion markets on Friday when US bourse Intercontinental Exchange was named as provider of an electronic benchmark gold price to replace the twice daily “fix’’.

Calling time on London’s century-old gold fix could mark the beginning of an even wider industry overhaul that may ultimately dilute the dominance of the highly profitable bilateral over-the-counter trading.

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