Gold dropped near its lowest level in five and a half years on Thursday ahead of the release of U.S. GDP data that is expected to show growth strengthened in the second quarter, thereby raising the prospects for an interest rate hike.
The yellow metal hit a low of $1082.37 an ounce, while it currently trading at $1085.94, after opening at $1096.93.
Gold prices dropped on pressure before the release of U.S. growth data, which is predicted to show the world’s biggest economy expanded 2.6 percent in the second quarter.
In the first quarter, the U.S. economy posted a 0.2 percent drop, but the economic circumstances have improved in the second quarter.
The Federal Reserve has reiterated that any monetary tightening is likely to occur if the economy shows progress.
Hence, any strong growth figures would raise expectations the Fed would raise its borrowing cost in September.
The dollar rose for a third straight session against a basket of major currencies to hit a high of 97.55, compared to the opening at 97.24, according to the dollar index.
Crude oil inched up to resume its rebound from near six-month low to trading around $48.90 a barrel after the EIA report released yesterday signaled a more than forecast rise in U.S. crude stocks last week.