Gold inched lower on Monday, steadying around $1,300 an ounce following its biggest one-day jump in three weeks, as investor worries about an early U.S. interest rate hike eased after a monthly jobs report failed to meet market expectations.
Bullion rose 1.2 percent on Friday after March non-farm payrolls came in slightly below the consensus estimate for a 200,000 jobs increase at 192,000.
Investors had speculated that a strong jobs figure, which followed a recent string of positive economic data, could prompt a quicker tightening of U.S. monetary policy. Gold had endured heavy selling ahead of the data, hitting a seven-week low of $1,277.29 on Tuesday.
"Gold rallied after the data on Friday and is still steady because the numbers were below expectations, but growth in the U.S. seems to be quite positive and is still expected to improve," Standard Bank analyst Walter de Wet said.
Spot gold was down 0.2 percent to $1,299.70 an ounce by 1009 GMT, after recording its biggest one-day percentage increase since March 12 on Friday, when it hit a one-week high of $1,306.50.
Gold futures for April delivery lost 0.3 percent to $1,299.20 an ounce.
"Further buying seen on Friday is viewed as a recovery phase to unwind the overextended downside conditions of March," UBS technical team said in a note.
In wider markets, the dollar was down 0.1 percent against a basket of six major currencies, while the euro was under pressure from expectations the ECB may undertake a programme of asset purchases this year to support the economy.
The state of the U.S. economy will continue to be the prime factor driving gold prices in the near term, while monetary policy by the U.S. Federal Reserve and the European Central Bank should impact prices in the longer run, analysts said.
The next market focus is the Fed minutes for the March FOMC meeting on Wednesday.
"The Fed minutes are out this week and I think gold is going to look at that ... obviously the focus will be on when the rates will be raised, which people may start analysing," De Wet said.
Federal Reserve Chair Janet Yellen indicated on March 19 that the central bank could raise interest rates in the first half of 2015. Yellen was more dovish in a speech on March 31, when she defended the Fed's supportive measures.
Low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been an important factor driving bullion higher in recent years.
Investor sentiment remained muted - holdings in the world's largest gold-backed exchange-traded fund SPDR Gold Trust falling 1.80 tonnes to 809.18 tonnes.
Hedge funds and money managers reduced their bullish bets in gold futures and options for a second straight week, data from the Commodity Futures Trading Commission showed.
In the physical markets, demand was subdued as markets in top buyer China were closed for the Tomb Sweeping holiday.
Weak physical demand has weighed on gold prices recently, due to discounted prices and weak imports by China over the last month.
Among other precious metals, platinum fell 1 percent to $1,429.50 an ounce, and palladium was down 0.6 percent at $781.75 an ounce.
Silver was down 0.3 percent to $19.83 an ounce.