O Monday gold fluctuated unable to find direction with market players awaiting Friday's report on jobs in the U.S. for August. A string of economic reports from China were also also in the focus.
Comex gold for December delivery dipped $2.20, or 0.19%, to trade at $1,131.80 a troy ounce during European morning hours.
Last week, the yellow metal lost 2% last week amid expectations the Federal Reserve will start raising interest rates at its next policy meeting in September.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange slumped 3.2 cents, or 1.39%, to trade at $2.314 a pound during morning hours in London, as worries over China's slowing economy dampened demand for the red metal.
Copper prices sank to a six-year low of $2.202 on August 24 as concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
Comments by Federal Reserve Vice Chairman Stanley Fischer on Friday
suggested that the door was still open for a rate hike at the Fed's next
meeting due to take place September 16-17. However, analysts keep doubting whether low inflation and turmoil on the financial markets will allow the Fed to lift off as soon as next month.
On Friday, the U.S. Labor Department will issue its highly-anticipated report on August nonfarm payrolls at 8:30AM ET.
The data is expected to show jobs growth of 220,000 last month, following an increase of 215,000 in July, while the unemployment rate is forecast to decline to 5.2% from 5.3%.
Monthly jobs gains above 200,000 are seen by economists as consistent with strong employment growth.
A strong U.S. nonfarm payrolls report was likely to add to bets the Fed will begin to raise interest rates, while a weak number could undermine the argument for an early rate hike.
On Monday the Shanghai Composite dropped 0.81% in volatile trade on Monday amid reports that Beijing will stop taking market intervention measures, which resulted in two straight days of a 5% jump in Shanghai last week.
The Shanghai Composite gauge ended down 12.5% this month, its third
straight month of declines, and a close runner-up to July’s 14% loss,
which was the index’s biggest monthly drop since August 2009.
Hong Kong's Hang Seng Index ended up 0.3%, but the Nikkei Stock Average finished down 1.3% and the S&P ASX 200 was down 1.1%. South Korea’s Kospi closed up 0.2% and Indonesia’s JSX was up 1.1%.
The rout in markets began when China unexpectedly devalued the renminbi on August 11, spurring fears that the economy may be slowing at a faster than expected rate.
Market players awaited a pair of manufacturing reports due out of China on Tuesday for further cues on the strength of the world's second largest economy.
The official China manufacturing purchasing managers' index was expected to fall to 49.7 in August from 50.0 in July.
Meanwhile, the final reading of the Caixin/Markit manufacturing purchasing managers’ index was forecast to inch up to 47.2 from a preliminary reading of 47.1, which was the lowest since July 2013. A reading below 50.0 indicates industry contraction.
