Investing.com – Gold prices struggled near the lowest level in more than five years on Thursday, amid ongoing speculation the Federal Reserve was on track to raise interest rates in September.
for December delivery on the Comex division of the New York Mercantile Exchange dipped 30 cents, or 0.03%, to trade at $1,085.30 a troy ounce during European morning hours after hitting a session low of $1,082.70 overnight.
A day earlier, gold shed $5.10, or 0.47%, to close at $1,085.60. Futures fell to a five-and-a-half year low of $1,072.30 on July 24. Gold prices lost $79.50, or 6.72%, in July, the biggest monthly decline since June 2013.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates in September for the first time since 2006.
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.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.91 early on Thursday, down from the previous session’s three-month peak of 98.33.
The greenback has been boosted recently by expectations that the improving U.S. economy will prompt the Federal Reserve to raise short term interest rates as early as September.
Data on Wednesday showed that service sector activity in the U.S. grew at the fastest pace since August 2005 in July. The Institute of Supply Management said its rose to 60.3 last month from 56.0 in June, above forecasts for a reading of 56.2.
The data came after payroll processing firm ADP said rose 185,000 last month, below expectations for an increase of 215,000.
Market players now looked ahead to Friday’s U.S. nonfarm payrolls report. The consensus forecast is that the report will show jobs growth of 223,000 last month. Monthly jobs gains above 200,000 are seen by economists as consistent with strong employment growth.
Also on the Comex, for September delivery tacked on 2.7 cents, or 0.19%, to trade at $14.58 a troy ounce.
Elsewhere in metals trading, for September delivery inched up 0.8 cents, or 0.33%, to trade at $2.356 a pound during morning hours in London.
Copper tumbled to a six-year low of $2.321 on August 3, following the release of disappointing .
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
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