Gold Stabilizes on Weaker US Jobs Data and Rate Hike Concerns

Gold prices have stabilized after a big weekly gain, as investors reassess the US jobs market and its impact on interest rates. Data released last week showed that US employers cut jobs in July, while hiring in the prior two months was revised lower, indicating a weaker labor market than previously thought.

The softer-than-expected jobs report led to reduced bets on near-term rate hikes, which has boosted gold prices. The Federal Reserve's policymakers are increasingly divided on how to combat inflation fueled by the war in the Middle East. Higher borrowing costs typically act as a headwind for bullion, but with interest rates potentially staying low, gold remains attractive.

Gold-backed exchange-traded funds (ETFs) in China saw increased inflows last week, marking the longest streak since March. The country's central bank also continued to add to its bullion reserves, with July's addition of 640,000 ounces marking the 21st straight month of accumulation.

Despite recent gains, gold remains nearly a fifth below pre-war levels, and investors are closely watching developments in the Middle East, particularly in Iran and Yemen. Gold prices edged up 0.1% to $4,347.01 an ounce on Monday morning, while silver advanced 0.6% to $63.92 an ounce.