Spot gold was down 0.1% at $1,772.27 per ounce, as of 0303 GMT, after dropping 1% in the previous session. U.S. gold futures eased 0.1% to $1,790.
"Gold off to a tranquil start as the market is still digesting the implication of the bumper U.S. jobs reports and to what extent it will influence the Fed," said Stephen Innes, managing partner at SPI Asset Management.
"I think the July surge in non-farm payroll employment raises the odds of a third 75 basis-point rate hike in September, which should be negative for gold."
Traders currently see a 73.5% probability the Fed continues the pace of 75-basis-point rate hikes for its next policy decision on Sept. 21 to tame soaring inflation after U.S. job growth unexpectedly accelerated in July.
Stunning U.S. payrolls report pushed back against talk of recession and lifted the dollar index to its highest since July 28, making gold more expensive for other currency holders. [US/]
While benchmark U.S. 10-year Treasury yields hovered near their highest level in more than two weeks scaled on Friday. [US/]
The Fed should consider more 75bp interest rate hikes at coming meetings in order to bring inflation back down to the central bank's goal, Fed Governor Michelle Bowman said on Saturday.
Although gold is seen as a hedge against inflation, rising U.S. interest rates dull bullion's appeal.
Focus this week will be on U.S. inflation data due on Wednesday that could offer more clues on Fed rate hike path.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.12% to 999.16 tonnes on Friday, its lowest since mid-Jan. [GOL/ETF]
Spot silver was flat at $19.87 per ounce, platinum fell 0.2% to $929.96, and palladium edged 0.1% lower at $2,123.94.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Uttaresh.V)
By Brijesh Patel
