Investing.com - Gold prices gained in European morning trade on Monday, rising toward the highest level in about 12 weeks as investors scaled back expectations for a more aggressive pace of rate hikes from the Federal Reserve this year.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose to a session peak of $1,227.00 a troy ounce, the most since November 16.
It was last at $1,225.45 by 3:15AM ET (08:15GMT), up $4.55, or around 0.4%.
Prices of the yellow metal climbed 2.4% last week, its best weekly gain in seven months.
The latest U.S. employment report showed that jobs growth beat expectations, but wage growth remained tepid, which will likely prompt the Fed to adopt a more cautious approach on raising interest rates this year.
The U.S. economy added 227,000 jobs in January from the prior month, the Labor Department said Friday, while the unemployment rate ticked up to 4.8% from 4.7% in December, as more Americans joined the workforce.
But average hourly earnings rose just 0.1% in January from a year earlier, below expectations for a 0.3% rise and slowing from 0.2% in December. The small gain lowered the year-on-year increase in earnings to 2.5% from 2.8% in December.
The weak wage growth was seen as weakening the case for near-term interest rate hikes.
Fed fund futures priced in a less than 10% chance of a rate hike in March after the jobs data on Friday, according to Investing.com's Fed Rate Monitor Tool. Odds of a June increase was seen at more than 60%.
The Fed, which raised rates in December, has forecast three rate increases this year. However, traders remained unconvinced, with markets continuing to price in just two rate hikes during the course of this year.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was at 99.85 in early European trade, not far from last week's two-month low of 99.19.
The greenback has been under pressure amid growing concern about the potential impact of the Trump Administration's protectionist stance.
Headlines from Washington will continue to dictate market sentiment as traders focus on Trump for further details on his promises of tax reform, infrastructure spending and deregulation as well as trade policies.
Also on the Comex, silver futures for March delivery jumped 9.9 cents, or 0.6%, to $17.57 a troy ounce.
Meanwhile, platinum tacked on 0.4% to $1,010.40, while palladium climbed around 1.5% to $759.85 an ounce.
Elsewhere in metals trading, copper futures inched up 1.6 cents, or 0.6%, to $2.632 a pound.