(Reuters) - Gold prices fell to a one-week low on Monday, as solid U.S. jobs data added to worries that the Federal Reserve would charge ahead with aggressive interest rate hikes to tame inflation.
Spot gold was down 0.4% at $1,687.79 per ounce, as of 0348 GMT, after hitting its lowest since Oct. 3 at $1,686.45. U.S. gold futures were down 0.8% at $1,695.60.
The dollar index was steady after touching a one-week high on Friday. A stronger greenback makes gold costlier for buyers holding other currencies.
"Gold prices are taking their cue from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected U.S. job report," said IG market strategist Yeap Jun Rong.
Data showed on Friday U.S. job growth slowed moderately in September while the unemployment rate dropped, signalling a resilient economy and dousing hopes of a Fed pivot anytime soon.
Investors will now focus on the U.S. inflation data due later this week. Headline consumer price inflation is seen slowing a touch to an annual 8.1%, but the core measure is forecast to accelerate to 6.5% from 6.3%.
"The core CPI is expected to show some persistence and should keep the Fed's rate-hike process well-anchored," said Yeap adding that gold prices seemed to remain locked in a downward trend for now.
While gold is often seen as a hedge against inflation, rising U.S. interest rates increase the opportunity cost of holding the non-yielding gold.
Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive U.S. monetary policy tightening.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 2.03 tonnes on Friday, marking its biggest outflow since late September.
Spot silver was down 2% at $19.71 per ounce after hitting a one-week low. Platinum fell 0.7% to $905.51, while palladium inched 0.1% higher to $2,183.99.