Gold falls on strong US jobs data and improved trade outlook

Synopsis

Gold prices declined. A strong United States jobs report reduced expectations of interest rate cuts. Optimism grew regarding United States-China trade relations. This also impacted gold's safe-haven appeal. Donald Trump aides are meeting Chinese officials in London. Discussions aim to resolve trade disputes. Russia claimed its forces advanced in Ukraine amid peace talk tensions.

Gold prices fell on Monday as a stronger-than-expected U.S. jobs report cooled expectations of interest rate cuts from the Federal Reserve, while optimism over easing trade tensions between U.S.-China weighed on the bullion's safe-haven demand.

FUNDAMENTALS

* Spot gold fell 0.2% to $3,303.19 an ounce, as of 0056 GMT. U.S. gold futures fell 0.7% to $3,323.40.

* Three of U.S. President Donald Trump's top aides will meet with their Chinese counterparts in London on Monday for talks aimed at resolving the trade dispute between the two largest economies that has kept global markets on edge.

* The U.S. economy added 139,000 jobs in May, surpassing analysts' expectations, while the unemployment rate was unchanged at 4.2%, the Labor Department said.

* Wage growth also exceeded forecasts, dampening the likelihood of imminent rate cuts. * Investors have scaled back bets on rate cuts, now anticipating one reduction in October.

* Trump, meanwhile, said that a decision on the next Federal Reserve chair would be announced soon, adding that a "good Fed chair" would lower interest rates. * The U.S. dollar index edged slightly up, making gold more expensive for overseas buyers.

* On the geopolitical front, Trump's order banning citizens of 12 countries from entering the U.S. goes into effect on Monday. * Russia stated on Sunday that its forces had advanced to the edge of Ukraine's Dnipropetrovsk region amid tensions over peace talks and the repatriation of soldiers' remains.

* Gold, often seen as a hedge against inflation and geopolitical uncertainty, could face pressure from higher interest rates, which reduce its appeal as a non-yielding asset.

* Elsewhere, spot silver remains unchanged at $35.94 per ounce, platinum fell 0.5% to $1,163.10, while palladium was down 0.5% to $1,041.75. DATA/EVENTS (GMT) 0130 China PPI, CPI YY May.

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