Gold fell sharply during the Asian trading session amid thin pressure as US markets closed for the Labor Day holiday.
However, the US dollar currency remained firm as market participants prepared for this week's jobs reports that could influence the Federal Reserve's (Fed) decision on interest rates.
At 9.30am, the price of gold was at $2,491.45, down 0.32% since it opened in early trading in the Asian session on Tuesday.
This week, market participants will be busy with several US economic dockets regarding employment data such as Manufacturing and Services PMI (ISM) production, JOLTS employment, National Employment Change (ADP) and Non-Farm Payrolls (NFP).
Last Friday, the Fed's preferred inflation gauge, the Core Personal Expenditure Price Index (PCE), remained unchanged at around 2.5% and reflected that inflation remained under control.
However, the last four NFP reports show the unemployment rate has risen from around 3.8% to 4.3% and this has fueled concerns among Fed officials that the market could be at risk.
This sentiment pushed the price of the precious yellow metal lower as investors began to put pressure on the USD on easing recession fears.
In addition, geopolitical risks have resurfaced even as US President Joe Biden is considering leading talks between Israel and Hamas in implementing a ceasefire and the release of hostages this weekend.
