Investing.com - Gold prices edged lower to start the week on Monday, as investors reacted to data from the U.S. Labor Department showing wages last month recorded their largest annual gain in more than 8-1/2 years.
The data contributed to the sentiment that inflation is picking up and higher interest rates are on the horizon.
Comex gold futures were a touch lower at $1,336.10 a troy ounce by 3:15AM ET (0815GMT), not far from a two-week low of $1,330.10 touched in the last session.
Gold fell almost 1% on Friday after a stronger-than-expected U.S. jobs report drove up the dollar and Treasury yields as the data laid some groundwork for a potentially more aggressive Federal Reserve interest-rate hikes this year.
The majority of economists believe that the U.S. central bank will hike rates three times this year. However, the market is now adjusting to the possibility that the Fed could raise rates four more times in 2018.
Gold is highly sensitive to rising rates, which increase the opportunity cost of holding nonyielding bullion.
The dollar index, which tracks the U.S. currency against six rivals, was a shade higher at 89.05, remaining above a more than four-year low of 88.25 hit late last month.
Treasury yields pushed higher, with the benchmark 10-year note running up to the highest level in more than four years at around 2.87%.
Recent chatter that the world's leading central banks will start tightening monetary policy faster than previously thought has sparked a global bond market selloff this year, with yields in the U.S., Europe and Asia all spiking higher.
Global financial markets will focus on this week's Bank of England policy meeting, for further details on when the central bank plans to raise rates again.
It will be a quiet week for the U.S. and the euro zone with only a handful of relatively unimportant data releases.
Washington will continue to be a focus as Congress faces a Feb. 8 budget deadline.
In other metals action, silver futures were steady at $16.70 a troy ounce.
Palladium prices slumped 1.5% to $1,029.05 an ounce.
Sister metal platinum meanwhile lost 0.4% at $995.50.
March copper was little changed at $3.195 a pound.