Gold climbed back above $4,100 an ounce on Monday, rising more than 1% in early trading as softer oil prices eased worries about inflation. Investors are now waiting for the US inflation report due on Tuesday before deciding what happens next.

Spot gold rose 1.6% to $4,129.69 an ounce by 0220 GMT on Monday, Reuters reported, while US gold futures for December delivery gained 1.6% to $4,139.00. On COMEX, gold futures were trading at $4,134.10 an ounce, up $59.20 or 1.45% from the previous close.

The rebound caps a strong run. Gold gained about 5% last week, its best weekly advance since late August, after falling to $3,870.10 on 30 October and then climbing as high as $4,147.06 last Thursday.

Strong jobs report had knocked gold down

A stronger than expected US jobs report on Friday, which showed employers added 165,000 jobs in October against expectations of 65,000, pushed the dollar and Treasury yields higher and briefly sent gold down towards $4,033. The unemployment rate fell to 4.1% from 4.2% in September. Gold settled near $4,065 on Friday, then recovered the loss in early Asian trading on Monday.

Traders now see about a 79.6% chance of a Federal Reserve rate hike in December, up from 72.8% before the jobs report, according to the CME FedWatch tool. Higher interest rates make gold less attractive because it pays no interest.

Tuesday brings the October US Consumer Price Index, the last major inflation reading before the Federal Reserve meets on 8 and 9 December. Analysts say a break above the recent high of $4,147 would open the way towards $4,200, while a hot inflation reading could send gold back towards $4,000.