By Melanie Burton
MELBOURNE (Reuters) - Spot gold stepped back on Monday from a three-month top hit the session before, after a U.S. jobs report cast some doubt over prospects for a quicker pace of rate hikes this year and pushed up the dollar.
The dollar held onto its post-payrolls gains early on Monday in a sluggish start to the week with the Lunar New Year holidays and the Super Bowl game all but guaranteeing a tepid session in Asia.
U.S. employment gains slowed more than expected in January as the boost to hiring from unseasonably mild weather faded, but rising wages and an unemployment rate at an eight-year low suggested the labour market recovery remains firm.
But an increasingly dovish trend by global central banks as they battle prolonged economic weakness could make a solid case to get back into the safe-haven metal.
"We prefer gold," said analyst Lachlan Shaw of UBS.
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"UBS cut expectations for U.S. GDP growth this year, and in that kind of world, people have cut expectations for Fed interest rate normalization. If the Fed holds off raising rates, then the USD will be weaker and gold should outperform."
Spot gold had slipped by 0.6 percent to $1,165.52 an ounce by 0515 GMT, as it fell back from its highest since Oct. 28 at $1,174.50 hit in the previous session.
U.S. gold climbed 0.8 percent to $1,166.70.
Across other metals, platinum slipped by 0.7 percent to $906.23 and palladium edged down 0.2 percent to $500 an ounce respectively.
Most Asian regional markets were closed on Monday for Lunar New Year, including Singapore, China, Hong Kong and Taiwan.
China's January exports may have fallen for a seventh month with factories still grappling with falling prices, but an expected jump in bank lending may underscore the government's bid to put a floor under the slowing economy.
Meanwhile, hedge funds and money managers boosted their bullish bet in COMEX gold to a three-month high in the week to Feb. 2, U.S. Commodity Futures Trading Commission data showed on Friday.
"The recent CFTC data suggests speculators continue to trim short positions and bulls are also returning to the market," ANZ said in a note. "The uncertainty around the Fed tightening cycle is likely to support gold prices in coming weeks."
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, also said its holdings rose 0.70 percent to 698.46 tonnes on Friday from 693.62 tonnes on Thursday.
(Reporting by Melanie Burton; Editing by Joseph Radford and Biju Dwarakanath)