(Reuters) – Gold prices edged lower on Monday as increasing expectations that the U.S. Federal Reserve might not aggressively cut interest rates later this month boosted the dollar, making gold expensive for holders of other currencies.

Spot gold fell 0.2% to $1,396.15 per ounce at 11:01 a.m. EDT (1501 GMT). U.S. gold futures were down 0.1% at $1,398.70 per ounce.

“On Friday, we had a bit of a jump in (U.S. Treasury) yields after the jobs data came out and that provided a bit of a boost to dollar,” said Bart Melek, head of commodity strategies at TD Securities in Toronto.

Strong jobs data on Friday relaxed the chances for a steep Fed rate cut at its July 30-31 meeting and lifted the dollar to three-week highs.

Bets for a 50 basis-point cut now hover around 7%, down from about 20% a week ago, according to CME Group’s FedWatch program.

However, modest wage gains and other economic data suggesting the world’s largest economy was losing steam meant the central bank was still expected to cut rates by a quarter point.

Markets are now looking ahead to Fed Chairman Jerome Powell’s semi-annual testimony to the U.S. Congress on the economy this week which could provide further cues on the near-term outlook for monetary policy.

“Expectations of Fed rate cuts will likely continue to support gold, but much of this may already be factored into prices and therefore be of diminishing bullish influence going forward,” James Steel, chief precious metals analyst at HSBC, wrote in a note.

“But we expect gold’s gains will be held in check by a firm U.S. dollar and emerging market consumer resistance to high prices.”

Gold hit $1,438.63 for the first time in six years last month and has been trading above key technical levels, supported by expectations of a rate cut by key central banks and lingering concerns about global economy.

“Continuing tensions with Iran and headlines about central banks around the world being strong buyers of the yellow metal are supporting prices” said David Meger, director of metals trading at High Ridge Futures.

The Chinese central bank increased its gold reserves for a seventh straight month in June, data showed. China is the world’s biggest consumer of the yellow metal.

Adding to existing tensions between the United States and Iran, Tehran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning “to be careful” from U.S. President Donald Trump.

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.18% to 796.97 tonnes on Friday from 798.44 tonnes on Wednesday.

Among other precious metals, silver gained 0.6% to $15.06 per ounce, while palladium dipped 0.4% to $1,560 per ounce and platinum rose 1% to $812.50 per ounce.