Investing.com - Gold prices held steady below a two-year high in European trade on Wednesday, as investors looked ahead to key U.S. data later in the session to gauge the health of the world's largest economy and whether it is strong enough to warrant an interest rate hike later this year.
The U.S. is due to release the ADP jobs report for July at 12:15GMT, or 8:15AM ET, with market analysts expecting a gain of 170,000 private sector payrolls.
At 14:00GMT, or 10:00AM ET, the U.S. Institute of Supply Management is to publish a report on service sector growth for July, amid expectations for a modest decline.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped $2.55, or 0.19% to trade at $1,370.05 a troy ounce by 06:59GMT, or 2:59AM ET.
A day earlier, gold jumped to $1,374.20, the most since July 11, when prices surged to a more than two-year high of $1,377.50.
Prices of the yellow metal have been well supported in recent sessions amid waning expectations that the Federal Reserve will raise interest rates anytime soon after data showed the U.S. economy grew much slower than expected in the second quarter.
Fed funds futures are currently pricing in just a 12% chance of a rate hike by September. December odds were at around 38%, compared to 53% at the start of last week.
Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
For the year, the precious metal is up nearly 28%, boosted by concerns over global growth and expectations of monetary stimulus.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, sank to a six-week low of 94.94 on Tuesday. It was last at 95.25 early Wednesday.
Also on the Comex, silver futures for September delivery eased up 1.7 cents, or 0.08%, to trade at $20.71 a troy ounce during morning hours in London, while copper futures shed 0.9 cents, or 0.41%, to $2.200 a pound.