Gold price hits one-week low

NEW YORK, Oct 10 (Reuters): Gold prices fell to a one-week low on Monday, as solid US jobs data added to worries that the Federal Reserve would charge ahead with aggressive interest rate hikes to tame inflation.

Spot gold XAU= was down 0.4 per cent at $1,687.79 per ounce, after hitting its lowest since Oct. 3 at $1,686.45. US gold futures GCv1 were down 0.8 per cent at $1,695.60.

The dollar index =USD was steady after touching a one-week high on Friday. A stronger greenback makes gold costlier for buyers holding other currencies.

"Gold prices are taking their cue from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected US job report," said IG market strategist Yeap Jun Rong.

Data showed on Friday US job growth slowed moderately in September while the unemployment rate dropped, signalling a resilient economy and dousing hopes of a Fed pivot anytime soon.

Investors will now focus on the US inflation data due later this week. Headline consumer price inflation is seen slowing a touch to an annual 8.1 per cent, but the core measure is forecast to accelerate to 6.5 per cent from 6.3 per cent.

"The core CPI is expected to show some persistence and should keep the Fed's rate-hike process well-anchored," said Yeap adding that gold prices seemed to remain locked in a downward trend for now.

While gold is often seen as a hedge against inflation, rising US interest rates increase the opportunity cost of holding the non-yielding gold.

Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive US monetary policy tightening.

Holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell by 2.03 tonnes on Friday, marking its biggest outflow since late September.