Gold pares gains as dollar rises ahead of US jobs report

Gold pared its gains and moved close to flat as the US dollar climbed to a three-month high, with markets awaiting American employment data for clues on the outlook for interest rates.

The dollar’s strength weighed on bullion, making the metal more expensive for buyers using other currencies and limiting its upward momentum.

The pullback came despite easing expectations of a US interest rate increase following weaker-than-expected inflation figures. Lower rate expectations generally support gold by reducing the appeal of interest-bearing assets relative to the precious metal.

Attention is now turning to the US jobs report, which could help investors assess the likely direction of monetary policy. Gold’s next move may depend on how the figures reshape expectations for rates and the dollar.