Investing.com - Gold prices came off the lowest levels of the session on Wednesday, after data showed that U.S. non-farm private employment rose less than expected in July, dampening optimism over the strength of the economy and fanning hopes that the Federal Reserve could delay raising interest rates until the very end of 2015.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange dipped $1.00, or 0.09%, to trade at $1,089.70 a troy ounce during U.S. morning hours after hitting a session low of $1,083.40 overnight.
A day earlier, gold inched up $1.30, or 0.12%, to close at $1,090.70. 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.
Payroll processing firm ADP said earlier that non-farm private employment rose by 185,000 last month, below expectations for an increase of 215,000. The economy created 229,000 jobs in June, whose figure was downwardly revised from a previously reported increase of 237,000.
While not viewed as a reliable guide for the government jobs report due on Friday, July 7, it does give guidance on private-sector hiring.
Later in the day, the ISM was to report on service sector activity. Market players were also waiting for Friday's U.S. nonfarm payrolls report. The consensus forecast is that the report will show jobs growth of 223,000.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates for the first time in nine years as soon as September.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, turned lower following the disappointing jobs report.
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.
Also on the Comex, silver futures for September delivery tacked on 1.8 cents, or 0.12%, to trade at $14.57 a troy ounce.
Elsewhere in metals trading, copper for September delivery declined 0.6 cents, or 0.24%, to trade at $2.356 a pound during morning hours in New York.
Data on Wednesday showing that activity in China's services sector grew at its fastest pace in 11 months in July failed to ease concerns over the health of the nation's economy.
The Caixin/Markit services purchasing managers' index rose to 53.8 last month from June's reading of 51.8, hitting the highest level since August 2014.
Copper tumbled to a six-year low of $2.321 earlier in the week, following the release of disappointing Chinese manufacturing activity data.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.