Investing.com - Gold prices struggled near a five-week low during European hours on Tuesday, 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 Conference Board is scheduled to release a report on U.S. consumer confidence for August at 10:00AM ET (14:00GMT). There is also S&P/Case-Shiller home price data at 9:00AM ET (13:00GMT).
Market players are also looking ahead to Friday’s nonfarm payrolls report for further hints on the timing of the next U.S. rate hike. Underscoring the importance of the upcoming jobs report, Fed Vice Chair Stanley Fischer said the data will influence the central bank’s decision on whether to hike rates in the coming weeks.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped $3.15, or 0.24%, to trade at $1,323.95 by 3:04AM ET (07:04GMT).
A day earlier, prices fell to as low as $1,317.20, a level not seen since July 26, amid indications the Federal Reserve is gearing up to hike interest rates as early 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 54%.
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 95.72 early Tuesday, not far from the prior session's two-week high of 95.81.
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.
Also on the Comex, silver futures for September delivery dipped 8.8 cents, or 0.47%, to trade at $18.68 a troy ounce during morning hours in London. Futures dropped to a two-month low of $18.37.