Investing.com - Gold prices were little changed near seven-week lows on Thursday, as market players shifted their focus to Friday's U.S. nonfarm payrolls report for further indications on the strength of the economy and the likelihood of a near-term rate hike.
The consensus forecast is that the data will show jobs growth of 180,000 in October, following an increase of 142,000 in September, while the unemployment rate is forecast to hold steady at 5.1%.
A strong nonfarm payrolls report was likely to add to already growing expectations for a December rate hike, while a weak number could undermine the argument for an early rate increase.
On Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 31 increased by 16,000 to 276,000 from the previous week’s total of 260,000. Analysts had expected jobless claims to rise by 2,000 to 262,000.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $1.50, or 0.14%, to trade at $1,107.70 a troy ounce during U.S. morning hours.
A day earlier, gold prices fell to $1,105.60, the lowest since September 15, after comments by Federal Reserve Chair Janet Yellen bolstered expectations for a rate hike in December.
Testifying before the House Financial Services Committee on Wednesday, Yellen described the U.S. economy as "performing well" and an interest rate hike in December as a "live possibility" if upcoming economic data were supportive.
The U.S. dollar rallied to the highest level since August 7 against a basket of six other major currencies on expectations for tighter monetary policy in the U.S. in the coming months.
Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December.
Gold had rallied in October as concerns over a global economic slowdown led by China and its impact on U.S. growth prospects had prompted market participants to push back expectations for a rate increase to March 2016.
But the Fed's hawkish statement last week forced market players to readjust expectations for higher interest rates to as early as December, triggering a sell-off in the bullion market. Prices are down more than 6% since October 29.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange tumbled 5.5 cents, or 2.38%, to trade at $2.268 a pound during morning hours in New York.