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Singapore - Gold held last month’s decline as investors await US jobs data due on Friday for further clues on the timing of an interest rate increase.
Bullion for immediate delivery was 0.1% lower at $1,307.75 an ounce at 2:45 p.m. in Singapore, according to Bloomberg generic pricing.
The metal dropped to $1 304.29 on Wednesday, the lowest level since June 24, and lost 3.1% in August.
Gold’s gains in 2016 have been dented after Federal Reserve officials indicated a greater likelihood of tightening before the end of the year.
Traders will scrutinize Friday’s payrolls report in light of Fed Vice chairperson Stanley Fischer’s comment on Tuesday that the bank will base decisions at its September 21 meeting on data.
Figures from ADP Research Institute on Wednesday showed that companies added workers in August in line with projections.
The ADP data "indicates that the momentum in the US labour market recovery is continuing," Vyanne Lai, an economist at National Australia Bank Ltd., said by e-mail.
"A similar outcome from the US non-farm payrolls number this Friday is likely to weigh on gold market sentiment."
Gross’s view
Bill Gross, the billionaire manager of the Janus Global Unconstrained Bond Fund, is recommending that the Fed raise interest rates twice by as early as March, with the first hike at this month’s meeting. Futures show a 36% chance of action then, up from 18% at the start of August.
The speculation about the Fed’s next step has helped the dollar to recover, blunting gold’s appeal. The Bloomberg Dollar Spot Index rose in August to post the first monthly increase since May.
Holdings in bullion-backed exchange traded funds lost 11.3 metric tonnes to 2 021.3 tonnes on Wednesday, data compiled by Bloomberg show. This was the biggest decline since August 12.
In China, bullion of 99.99% purity fell 0.5% to 281.80 yuan a gram ($1 312.13 an ounce) on the Shanghai Gold Exchange.
On the Shanghai Futures Exchange, gold for December delivery dropped 0.3% to 282.70 yuan a gram, while silver rose 0.1% to 4 170 yuan a kilogram Spot silver added 0.3%, platinum climbed 0.2% and palladium advanced 0.5%.
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