Gold steadied below a seven-week high on Tuesday as the dollar regained momentum, although uncertainty about the timing of a U.S. interest rate hike kept bullion above $1,200 an ounce.
Friday’s bleak U.S. non-farm payrolls data fuelled expectations that the Federal Reserve could delay an anticipated rate increase this year, boosting gold’s safe-haven appeal. U.S. jobs posted the slowest growth in more than a year in March.
New York Fed President William Dudley said the timing of the U.S. rate hike, which would be the first in nearly a decade, is unclear and policymakers must watch that the U.S. economy’s surprising recent weakness does not signal a more substantial slowdown.
“We haven’t changed our expectation of a mid-year rate hike but the weak number we had on Friday certainly eschews the risk towards more of a later rather than an earlier hike,” said Victor Thianpiriya, analyst at Australia and New Zealand Bank.
Spot gold was nearly flat at $1,213.11 an ounce at 0631 GMT. It hit a high of $1,224.10 on Monday, its loftiest since Feb. 17.
U.S. gold for June delivery slipped 0.4 percent to $1,213.50 an ounce.
Thianpiriya said he still expects gold to drop to $1,100 by end-June, under pressure from a firmer dollar. A stronger greenback makes dollar-denominated assets such as gold more expensive for holders of other currencies.