Gold prices struggled near three-week lows during European morning hours on Tuesday, amid growing expectations among traders that the Federal Reserve will raise interest rates at its March policy meeting next week.
Comex gold futures were steady at $1,225.35 a troy ounce by 3:20AM ET (08:20GMT). The precious metal fell to $1,223.00 on Friday, the lowest since February 15.
Spot gold was little changed at $1,225.40 per ounce.
Markets dramatically adjusted expectations for U.S. interest rate hikes this year following hawkish comments from several top Fed officials last week, including Chair Janet Yellen.
Futures traders are pricing in around a 90% chance of a hike at the Fed's March 14-15 meeting.
Odds of a second rate hike in September currently stand at 67%, while a third hike in December is priced in at 53%, aligning market expectations with the Fed's current forecast for three rate hikes in 2017.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Investors are now waiting for further clues on the likely pace of hikes, with all eyes on this week's U.S. jobs report.
Besides the employment report, this week's calendar also features U.S. data on the trade balance on Tuesday, ADP private sector nonfarm payrolls on Wednesday and weekly jobless claims on Thursday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 101.56 in London morning trade. It reached a two-month high of 102.27 last week.
Also on the Comex, silver futures for May delivery slipped 3.1 cents, or around 0.2%, to $17.74 a troy ounce.
Elsewhere in metals trading, copper futures lost 0.8 cents, or about 0.3%, to $2.644 a pound.
