Investing.com - Gold futures struggled for direction on Monday, amid ongoing uncertainty about whether the Federal Reserve will increase interest rates later this month.
Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up 20 cents, or 0.02%, to trade at $1,121.60 a troy ounce during European morning hours. U.S. markets will be closed on Monday for the Labor Day holiday.
On Friday, gold dropped $3.10, or 0.28%, after mixed U.S. payrolls data failed to quell uncertainty over the prospect of a near-term interest rate hike from the Federal Reserve.
The Labor Department reported that the U.S. economy added 173,000 jobs last month, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier.
However, the unemployment rate dropped from 5.3% to 5.1%, better than expectations for 5.2% and the lowest since April 2008.
Hourly earnings, a component of the jobs report that the Federal Reserve has said must rise, ticked up 0.3%, above forecasts for a 0.2% increase and following a gain of 0.2% in the previous month.
The jobs report failed to provide much clarity on when the Federal Reserve will decide to raise short term interest rates. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Prices of the precious metal dropped $10.50, or 1.1%, last week, the second straight weekly loss. Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange rallied 4.4 cents, or 1.92%, to trade at $2.356 a pound.
Copper's gains came as a sharp rebound in European equity markets helped soothe investors' tattered nerves.
Most Asian markets ended lower on Monday, as investors monitored wild swings in China's equity markets.
The Shanghai Composite, which reopened after a four-day extended weekend, took investors on a roller coaster ride, rising almost 2% after the open, only to turn negative after the midday break to end down 2.5%.
The red metal sank to a six-year low of $2.202 on August 24 as concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.