Gold prices fell on Monday as the U.S. dollar recovered slightly. Last week, the greenback had its worst weekly performance in more than two months. A stronger dollar makes the yellow metal more expensive for investors using rival currencies.

Spot gold is currently trading at $1,809.56 per ounce as of 0807.

Last week, Federal Reserve Chairman Jerome Powell said they are not likely to raise interest rates anytime soon. That is positive for the bullion. But St. Louis Federal Reserve Bank President James Bullard argued that the central bank needs to reduce its monthly bond purchases. He suggested ending the program in early 2022 to allow an interest rate increase. He warned that scrambling to raise interest rates when inflation remains high could spark a recession.

Now, market participants are focusing on U.S. non-farm payroll data for July. The labor market is one of the factors considered by the Fed in tapering monetary stimulus. Economists expect a 926,000 job increase.

Stephen Innes, a managing partner at SPI Asset Management, said the data would give investors clues about policy tapering. But they fear robust employment growth because it will boost the dollar.

Meanwhile, China’s factory activity in June grew at the slowest pace in 17 months. The official manufacturing PMI dropped to 50.4, which raised concerns about a slowdown in the second-largest economy in the world.

Another factor that could influence gold prices is the surge in the Delta variant of the coronavirus. U.S. National Institute of Allergy and Infectious Diseases director Anthony Fauci warned that things are going to get worse. He also said that there would likely be some pain and suffering in the future.

In physical trading, rising prices dampened gold demand in India last week. Local gold futures rose by 1.5% to 48,200 rupees per 10 grams. Dealers offered discounts of up to $4 per ounce. In other major Asian hubs, gold premiums ranged from $1-4 in China, $0.80-1.80 in Hong Kong and $0.50-1.70 in Singapore.

On the technical front, Reuters technical analyst Wang Tao predicted spot gold might go back down to $1,798.98 an ounce since it failed to break the resistance level at $1,832.80 on two tries. Margaret Yang of DailyFX agreed and added that the MACD indicator suggests a fading bullish momentum. She sees an immediate support level at $1,790 per ounce.

In a related development, the U.S. Commodity Futures Trading Commission reported that market speculators cut their net-long positions in COMEX gold contracts for the week that ended on July 27.