WASHINGTON (dpa-AFX) - Gold prices held steady on Monday after gaining the most in two months on Friday as traders ramped up bets of imminent Federal Reserve rate cuts.
Spot gold edged down 0.1 percent to $3,360.00 per ounce in European trade, while U.S. gold futures were up 0.4 percent at $3,412.87.
The U.S. dollar index found some support at lower levels after a sharp 1.5 percent decline on Friday on the back of weak jobs data and uncertainty over Fed independence.
U.S. employment growth undershot expectations in July and the count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labor market conditions.
President Trump abruptly fired a senior Labour Department official responsible for compiling jobs statistics and said that Federal Reverse Chairman Jerome Powell should be 'put out to pasture,' stoking fears of political influence on key institutions.
White House economic adviser Kevin Hassett said that Trump and his team would study whether firing the Fed Chair was an option.
The abrupt resignation of Fed Governor Adriana Klugler also fueled fresh doubts over U.S. data and policy direction.
Meanwhile, with the prospect of earlier and larger Fed cuts now in play, investors look forward to reports on factory orders, service sector activity and jobless claims along with speeches by Federal Reserve officials this week for additional clues on the Fed's interest rate path.
Fed's Williams said in an interview with the Wall Street Journal that he'll have 'very much an open mind' on September meeting rate cut.
Chicago Federal Reserve President Austan Goolsbee said in a CBS interview that the tariffs could lead U.S. economic activity to 'fall off' by the summer from 'artificially high' activity caused by panic purchasing ahead of tariffs.
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