The reports made investors less confident that Fed policy makers will raise US interest rates when they meet on September 20-21, but many say a rate hike in December is possible.
"However, if rate concerns really rattle the financial markets, more profound equity market declines could set off renewed "safe-haven" purchases", Steel said.
Gold was little changed on Monday as a fall in stock markets helped to win it safe-haven support against the view that the U.S. Federal Reserve will raise rates as early as this month following upbeat comments by central bank officials last week. Spot gold dipped by 0.1 percent to $1,321.70 an ounce at 0950 GMT, with USA gold futures down 0.2 percent at $1,323.60.
"Gold is approaching the very important $1,300-$1,310 support zone, which has held incredibly well since the Brexit rally and will be a key focus for traders in the short term".
Goldman Sachs further cut its view on the likelihood of a USA rate hike next week, dropping it to just 25 per cent from 40 per cent.
"We expect gold to continue to be under modest pressure, especially if expectations about a September Fed rate move continue to become more firmly entrenched", INTL FCStone analyst Edward Meir said in a note. Spot gold looks neutral in a range of $1,319-$1,330 per ounce and an escape could point a direction, Reuters technical analyst Wang Tao said.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Asian shares skidded on Monday with investors rattled by rising bond yields and the talk the Fed might be serious about lifting USA interest rates as early as next week.
The dollar index, which measures the greenback against a basket of six major currencies, fell 0.1 percent to 95.535. A stronger dollar makes gold more expensive for holders of other currencies.
The COMEX silver futures contract for December delivery gained ~0.54% and was trading at ~$19.08 per ounce. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.35 percent to 932.23 tonnes on Thursday. It fell over 2 percent to touch an over 2-month low of $1,026.10 on Tuesday.
Palladium rose 0.8 per cent at $656.75.
Japanese manufacturers' confidence bounced from a three-year low, while sentiment in the services sector hit its lowest since 2013 when the central bank began bold monetary stimulus, a Reuters poll showed, underscoring a fragile economic recovery.
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