Investing.com - Gold prices moved lower on Wednesday, pulling away from the previous session’s seven-week highs as investors locked in profits and as the U.S. dollar stabilized ahead of a highly-anticipated report on U.S. employment due later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were down 0.52% at $1,266.04, off Tuesday’s seven-week peak of 1,273.30.
The August contract ended Thursday’s session 0.47% higher at $1,272.60 an ounce.
Futures were likely to find support at $1,256.90, the low of July 28 and resistance at $1,273.30, Tuesday’s high.
The dollar steadied near 15-month lows amid deepening political turmoil in Washington and diminished expectations for a third rate hike by the Federal Reserve this year.
The central bank’s subdued inflation outlook has raised doubts over whether it will be able to stick to its planned tightening path.
Fading hopes for tax reforms and fiscal stimulus under the turbulent Trump administration have also weighed on the dollar.
Market participants were looking ahead to the upcoming ADP report on nonfarm employment changed for further indications on the strength of the U.S. job market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 92.86, just off the previous session’s 15-month trough of 92.64.
Gold is sensitive to moves higher in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere in metals trading, silver futures for September delivery declined 0.75% to $16.640 a troy ounce, while copper futures for September delivery fell 0.24% to $2.874 a pound.