Investing.com - Gold prices was trading close to one-month lows on Wednesday as robust U.S. private sector jobs data and fresh hopes for a deal between Greece and its creditors weighed.
Gold futures for August delivery were at $1,168.4 a troy ounce, not far from Tuesday’s four-week lows of $1,165.4.
The greenback was boosted after a report showing U.S private sector job creation increased more than expected in June adding to evidence that the economy may be stabilizing after a recent bout of weakness.
The data bolstered expectations for higher U.S. interest rates later this year.
Payroll processing firm ADP said non-farm payrolls rose by a seasonally adjusted 237,000 last month, compared to expectations for jobs growth of 218,000.
May’s private sector payroll gains were revised up to 203,000 from an initial estimate of 201,000.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.42% to 96.16, compared to 96.07 ahead of the report.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, hopes that Greece was trying to reach an agreement with its creditors dampened safe have demand for the precious metal, weighing on prices.
Gold is usually seen as an alternative investment during times of financial and economic uncertainty.
Greek Prime Minister Alexis Tsipras sent new proposals as part of a request for a third bailout, indicating that he was prepared to accept the majority of spending cuts demanded by the country’s creditors.
But German chancellor Angela Merkel said Wednesday there will be no negotiations on a new bailout for Greece before Sunday’s referendum.
On Wednesday Greece became the first developed country to default on the International Monetary Fund after its second bailout program expired late Tuesday.
The IMF confirmed that the Greek government failed to make a scheduled €1.6 billion loan repayment by close of business on Tuesday.
The default by Greece added to fears over the country’s solvency and fueled doubts over the condition of Greek banks and the collateral they use for European Central Bank loans.
Elsewhere in metals trading, silver futures for September delivery was almost unchanged at $15.58 a troy ounce, while copper for September delivery eased to $2.613 a pound.
The demand outlook for copper was hit after data from China on Wednesday indicated that activity in the manufacturing sector remained sluggish in June but service sector activity showed a slight uptick.