LONDON: Gold fell on Monday, snapping three days of gains as the dollar index rose back towards its 2018 peak and last week’s soft US jobs data did little to dampen optimism about the world’s largest economy.

That left traders betting the Federal Reserve would press 0n with lifting US interest rates this year.

Higher rates typically weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion. Spot gold was down 0.2 per cent at $1,312.03 an ounce by 1135 GMT, while US gold futures for June delivery were 0.2pc lower at $1,312.70.

The market was thinned by a national holiday in Britain, which closed trading desks in London. The dollar index rose back towards Friday’s peak for the year on Monday after US jobs and wages data did little to alter perceptions of strength in the US economy and consequently expectations for more Fed rate hikes.

Meanwhile, a surprise drop in German industrial orders served as a reminder that softer economic data could encourage the European Central Bank to delay the unwinding of its extraordinary stimulus measures. “This all boosts the US dollar and weighs on gold,” he said. Investors were therefore tempering bets on higher gold prices, he said, adding speculators had cut their net long positions to the lowest since July 2017 with a “massive reduction” in the last few trading weeks.

Meanwhile silver was down 0.3pc at $16.43 an ounce, while palladium was 0.7pc higher at $973.90. Platinum was up 0.7pc at $911.90 an ounce, having earlier hit its highest since April 25 at $918.70. Friday’s positioning data from the CFTC suggests the metal may be due a bounce, analysts said. On platinum, Societe Generale said money managers increased their short positions by 8,813 contracts, taking their short positions as apcage of total open interest to 41.9pc, the highest level since July 2017.

Published in Dawn, May 8th, 2018