The dollar index hit its highest levels in more than a week, making gold more expensive for buyers holding other currencies.
Data on Friday showed that US employers hired more workers than expected in September, while the unemployment rate fell to 3.5%, providing ammunition for the Federal Reserve to deliver another sharp rate hike at its next policy meeting. Fed fund futures forecasts a 90% chance of up 75 basis points.
Attention now turns to US inflation data due this week. Consumer price inflation is expected to ease slightly to 8.1% annually, but the core measure is expected to accelerate to 6.5% from 6.3%.
Higher interest rates increase the opportunity cost of holding non-interest bearing bullion.
Among other precious metals, silver fell 2.3% to $ 19.65 an ounce after hitting a one-week low, platinum fell 1.5% to $ 898.58, while palladium rose 0.1% to $2,183.99.