Gold prices retreated from two-week highs on Monday, weighed down by a firmer U.S. dollar that eroded the appeal of the non-yielding asset.
Despite the currency headwind, losses remained contained as fresh data pointing to a cooling U.S. labor market tempered expectations for aggressive monetary tightening.
The pullback follows a volatile period for precious metals, which had previously touched a two-month low amid geopolitical uncertainty surrounding the U.S.-Iran conflict.
That earlier sell-off was driven by a risk-off rally in the dollar and higher oil prices, creating a complex backdrop for traders balancing safe-haven flows against currency strength.
Market participants are now closely watching the interplay between labor market softness and dollar momentum.
While a weaker jobs report typically supports gold by lowering rate-hike expectations, the current dollar strength suggests investors are prioritizing yield and currency stability over traditional safe-haven bids.