Gold bars are seen at the Kazakhstan's National Bank vault in Almaty, Kazakhstan. Picture: REUTERS/MARIYA GORDEYEVA
Gold bars are seen at the Kazakhstan's National Bank vault in Almaty, Kazakhstan. Picture: REUTERS/MARIYA GORDEYEVA

Bengaluru — Gold prices inched lower on Monday as the dollar firmed, but concern about global economic slowdown further increased by poor US jobs data kept the precious metal pinned at near a more than one-week peak level.

As of 3.59am GMT, spot gold was down 0.1% at $1,297.20/oz, after briefly breaching the $1,300 ceiling for the first time since March 1 in the previous session.

It rose 1% on Friday, to register its biggest one day gain since February 19.

US gold futures were down 0.2% at $1,296.90/oz.

The dollar rose 0.1% against major currencies and traded close to its near two-month peak, making gold costly for holders of other currencies.

“The fall this morning is a temporary occurrence due to some early morning profit-taking after Friday’s move up. The US dollar is mostly stronger and that is adding some downward pressure on gold,” said Jeffrey Halley, senior market analyst at Oanda.

“Structurally gold is well positioned to move higher over the coming months. As the world economy continues to slow and uncertainty increases, it is going to be supportive for gold,” he said.

Gold is often seen as an alternative investment during times of political and financial uncertainty.

Limiting gold’s losses, however, were weaker equity markets, which struggled for traction after US employment data on Friday raised doubts about the strength of the global economy.

The US economy created only 20,000 jobs in February, the weakest since September 2017, adding to signs of a sharp slowdown in economic activity in the first quarter.

“Bullion’s appeal though dented by robust US dollar prospects will stand tall amidst a decelerating global economy in 2019,” Phillip Futures said in a note adding gold will stay firm as the UK prepares for key votes on the Brexit deal.

The UK is due to leave the EU on March 29, with parliament expected to reject Prime Minister Theresa May’s deal in a vote on Tuesday. Britain will face an economic shock if it leaves without a deal.

Meanwhile, speculators slashed their net long position in gold in the week to March 5, to its lowest in over a month, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Among other precious metals, silver was flat at $15.30/oz.

Palladium was up 0.1% at 1,515.19/oz, while platinum dipped about 0.1% to $814.45/oz, after touching its lowest since February 19 at $806.50 earlier in the day.