Investing.com - Gold prices struggled near a two-month low during European hours on Wednesday, as investors looked ahead to upcoming U.S. data to gauge if the world's largest economy is strong enough to withstand a rise in borrowing costs in the coming months.
The U.S. is due to release the ADP jobs report for July at 12:15GMT, or 8:15AM ET, with market analysts expecting a gain of 175,000 private sector payrolls.
There is also Chicago PMI data at 9:45AM ET (13:45GMT) and a report on pending home sales at 10:00AM ET (14:00GMT).
Market players are also looking ahead to Friday’s nonfarm payrolls report, which could determine whether the Fed raises rates in September. The consensus forecast is that the data will show jobs growth of 180,000 in August, following an increase of 255,000 in the preceding month.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped 55 cents, or 0.04%, to trade at $1,315.95 by 3:07AM ET (07:07GMT).
A day earlier, prices fell to as low as $1,312.00, a level not seen since June 28, after upbeat U.S. consumer confidence data added to speculation that the Federal Reserve is gearing up to hike interest rates as soon as next month.
According to Investing.com's Fed Rate Monitor Tool, investors are pricing in a 24% chance of a rate hike by September. December odds were at around 53%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 96.10 early Wednesday, after rising overnight to 96.15, the most since August 9.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.