Gold prices ended nearly flat in light trade on Monday, supported by a weak dollar and backing from senior Fed officials of continued monetary stimulus, but pressured by caution ahead of an important U.S. payrolls report.
Bullion moved in a $10 range with much lower-than-average turnover due to a light schedule of U.S. economic indicators on Monday, traders said.
Gold prices initially rose after St. Louis Federal Reserve President James Bullard said the Fed should scale back its asset purchase program only when the U.S. economy improves and even then only slowly, while Fed Board Governor Jerome Powell said there is no need to rush the process.
Some investors stayed on the sidelines ahead of Friday's October U.S. nonfarm payrolls report, which will provide clues about whether the U.S. central bank will maintain its bond-buying stimulus for a while longer.
"Gold is still very dependent on economic weakness and extended quantitative easing to prosper at the moment," said Saxo Bank's head of commodity strategy Ole Hansen.
The metal was also underpinned by fresh buying and short covering triggered by a drop earlier in the day toward technical support around $1,300 an ounce, Hansen said.
Spot gold inched down 0.1 percent at $1,313.76 an ounce by 3:58 p.m. EST (1958 GMT), after falling nearly 3 percent last week.
U.S. gold futures for December delivery settled up $1.50 an ounce at $1,314.70.
Trading volume was less than 80,000 lots, about 45 percent below its 30-day average, preliminary Reuters data showed, set to be one of the weakest daily turnover this year.
Outflows from gold-backed ETFs resumed on Friday, when holdings of New York's SPDR Gold Shares declined 5.7 tonnes, their largest one-day outflow since Oct. 21.
INDIA PHYSICAL DEMAND WEAK
The sharp drop in prices last week has failed to revive physical demand, and some dealers say the price may have to fall below $1,300 to attract more buyers.
Indian demand was muted during the biggest gold-buying festivals of Dhanteras and Diwali, celebrated on Friday and over the weekend, with many opting for cheaper silver due to high gold premiums and the scarcity of the metal on the domestic market.
Meanwhile, China's gold consumption is expected to climb to more than 1,000 tonnes this year, though the trend is not sustainable and could drop below this level from 2014, the country's biggest gold producer China Gold Group Corp said on Monday.
Silver was down 1 percent at $21.61 an ounce. Platinum was up 0.5 percent at $1,450.25 an ounce and palladium was up 1 percent at $745.25 an ounce.