Gold prices fell on Monday as the dollar firmed after the U.S. non-farm payrolls report pointed to a tight labour market and raised the odds of another rate hike by the Federal Reserve at its May policy meeting.

FUNDAMENTALS

* Spot gold was down 0.4% at $2,000.57 per ounce, as of 0041 GMT. U.S. gold futures also slipped 0.4% to $2,017.80.

* The dollar index was 0.1% higher, making bullion expensive for overseas buyers.

* Friday’s data from the U.S. Labor Department showed non-farm payrolls increased by 236,000 jobs in March, versus expectations of 239,000. The data also showed the unemployment rate dipped to 3.5% from 3.6% in February.

* The data raised bets that the U.S. central bank would raise interest rates next month, with markets pricing in a 66.3% chance of the Fed hiking rates by a quarter of a percentage point, according to the CME FedWatch tool.

* While gold is traditionally considered a hedge against inflation, higher interest rates dim non-yielding bullion’s appeal. * European Central Bank governing council member Klaas Knot on Friday said it was unclear to him if a rates rise of 50 basis points (bps) was necessary in May, or if a scale back to 25 bps was a possibility.

* Physical gold demand in key Asian hubs hit a pause last week with high domestic prices forcing dealers in some markets to lure customers with discounts.

* Spot silver fell 0.5% to $24.89 per ounce, platinum lost 0.5% to $1,002.67 and palladium rose 0.2% to $1,469.55.

* Some European markets are closed on Monday for the Easter holidays.