Investing.com - Gold futures fell to the lowest levels of the session on Wednesday, after mostly upbeat U.S. economic data supported the case for a rate hike later this month.
Gold for December delivery on the Comex division of the New York Mercantile Exchange shed $3.80, or 0.33%, to trade at $1,136.00 a troy ounce during U.S. morning hours.
A day earlier, gold rallied $7.30, or 0.64%. Tuesday's gains came as steep losses in global equity markets and a weaker U.S. dollar supported demand for the yellow metal.
The Labor Department said non-farm business sector labor productivity increased by 3.3% in the second quarter, above forecasts for a gain of 2.8% and up from an initial estimate of 1.3%.
The report came after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 190,000 last month, below expectations for an increase of 201,000. The economy created 177,000 jobs in July, whose figure was downwardly revised from a previously reported increase of 185,000.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.45% at 95.82 early Wednesday.
Investors now looked ahead to Friday’s nonfarm payrolls report, which could help to provide clarity on the likelihood of a near-term interest rate hike.
The consensus forecast is that the data will show jobs growth of 220,000 last month, following an increase of 215,000 in July, while the unemployment rate is forecast to decline to 5.2% from 5.3%.
A strong jobs report was likely to add to indications that the Federal Reserve will raise rates in September, instead of December, while a weak number could undermine the argument for an early rate hike.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
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 inched up 1.4 cents, or 0.6%, to trade at $2.316 a pound.
Copper futures tumbled on Tuesday after a pair of reports on China's manufacturing sector added to concerns over a deepening slowdown in the world's second largest economy.
The red metal sank to a six-year low of $2.202 on August 24 as concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.