After some fluctuations, spot gold remained flat, compared with Friday's close, at $1,246.20 an ounce at 1010 GMT, while February US futures lost $1.10 an ounce at $1,245.80. The metal is still up 3.4% this year, thanks to robust Chinese purchases ahead of the Lunar New Year later this month, after prices dropped by 28% last year following 12 straight annual advances.
Despite expectations of a gradual pick-up in the US economy this year, copperwhich reflects the health of the global economy has lost nearly 1% so far this year as top consumer China is well stocked up, while price rise in other metals remained subdued, said analysts.
Earlier in the session, gold prices breached through chart resistance to hit $1,254.05 an ounce in their loftiest rally since December 12, as some investors thought the lowest monthly job addition in the US in three years last month could prompt a review by the Federal Reserve of its policy of gradual rollback of bullion-friendly stimulus.
However, the realisation that dismal jobs data could be temporary as extreme cold weather conditions might have had an impact on hiring prompted a retreat by investors, said analysts. This was aided by a drop in premiums for gold with 99.9% purity to $17 on Monday on the Shanghai Gold Exchange from $18 on Friday, reflecting a moderation in Chinese demand, they added.
Analysts, however, are conservative about a sustained rally in the precious metal this year unless Indian demand stages a significant rebound, as the tapering is expected to keep its own pace.
The Fed's quantitative easing was a key factor driving gold prices to record highs in recent years. It kept interest rates at rock bottom, cutting the opportunity cost of holding gold while stoking inflation fears.
Gold output in China gained 7% from a year earlier to reach 392.141 tonne in the January-November period from a year before, China Gold Association data showed on Monday.
Meanwhile, gold premiums in India eased to $120 an ounce over London futures, compared with $130 an ounce last week, as demand remained muted. In Delhi, gold price dropped by R15 to R30,200 per 10 gm, while the silver rate stayed unchanged at R44,800 per kg.
Nickel hit a two-week high in intraday trade on Monday, extending an almost 4% gain on Friday, as a decision by top exporter Indonesia on Sunday to ban unprocessed ore supplies takes effect.
Three month nickel on the London Metal Exchange surged 2.4% to $14,190 a tonne, its maximum since December 30, before pulling back to $14,030 a tonne by 1037 GMT, still up 1.19%. Shares of Australian nickel miner Western Areas and Vale (Indonesia) jumped on Monday on expectations nickel prices would rise.
Indonesia sought to ban on Sunday exports of a range of mineral ores to force firms to build more smelters, although it decided at the last minute to allow supplies of copper, iron ore, lead and zinc concentrates.
However, copper prices dropped as top consumer China was well stocked up and Indonesia spared a ban on supplies, said analysts.
Three-month copper in London dropped 0.30% to $7,278 a tonne. Copper lost around 7% in value last year, and is down about 1% so far this year. Aluminium shed 0.07% at $1,763 a tonne.