By Vijaykumar Vedala
BENGALURU (Reuters) - Gold touched a two-week high on Monday before inching lower slightly, following its biggest one-day gain in nearly four months in the previous session after lower-than-expected U.S. employment data cut the chance of a near-term U.S. rate hike.
Bullion, which has gained about 17 percent so far this year, has been under pressure over the past few weeks as comments from senior U.S. central bank officials, including chief Janet Yellen, boosted expectations of an imminent interest rate rise that would be bearish for non-interest bearing gold.
The safe haven asset got a breather on Friday as data showed the U.S. economy created the fewest number of jobs in more than 5-1/2 years in May, pushing the yellow metal about 2.8 percent higher in its biggest one-day percentage gain since Feb. 11.
Spot gold was down 0.3 percent to $1,240.80 per ounce by 0646 GMT. It reached a high of $1,248.40, its best since May 24. U.S. gold was little changed at $1,243.20.
"The nonfarm payroll figures from last Friday still have some kind of a ripple effect on gold prices but the margin of effect is diminishing and because of that $1,250 should be the immediate resistance level today," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
At an event on Monday in Philadelphia, Yellen gets her last chance to offer insight into Fed thinking before a media blackout takes effect ahead of the June 14-15 monetary policy meeting.
Wall Street's top banks unanimously expect the Fed to leave interest rates unchanged this month, a Reuters poll showed, with bank economists pointing to a weakening U.S. employment scene and Britain's pending vote on remaining in the European Union.
"Although prices could still work a bit higher from here over the course of the month, we think values will be hard pressed to push above the $1,275 range over the course of June," said INTL FCStone analyst Edward Meir.
"On the downside, another retest of $1,190 cannot be ruled out, especially if the dollar stabilizes on the back of stronger U.S. macro numbers."
The dollar languished near three-week lows against a basket of major currencies on Monday.
Hedge funds and money managers reduced their bullish position in COMEX gold contracts in the week to May 31, government data showed.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.71 percent to 881.44 tonnes on Friday, the highest since October, 2013.
Among other precious metals, spot silver fell 0.1 percent to $16.38 per ounce.
(Additional reporting by Koustav Samanta in Bengaluru; Editing by Christian Schmollinger and Gopakumar Warrier)
