Investing.com - Gold prices continued to struggle near the lowest level in almost four months during Europe's session on Thursday, as market players looked ahead to data on U.S. nonfarm payrolls on Friday for fresh clues on the likelihood of a December rate hike.
The consensus forecast is that the data will show jobs growth of 175,000 in September, following an increase of 151,000 in August. The unemployment rate is forecast to hold steady at 4.9%, while average hourly earnings are expected to rise 0.2% after gaining 0.1% a month earlier.
A strong nonfarm payrolls report would reinforce the view that a U.S. rate hike in December may be on the cards, after hawkish signals from senior Fed officials in recent weeks revived speculation of a rate hike before the end of the year.
Ahead of the employment data, markets will digest a report on initial jobless claims at 8:30AM ET (12:30GMT) later Thursday.
Gold for December delivery on the Comex division of the New York Mercantile Exchange slipped $1.20, or 0.09%, to $1,267.40 a troy ounce by 3:10AM ET (07:10GMT).
The contract fell to $1,264.10 on Wednesday, a level not seen since June 24, after robust U.S. service sector data added to speculation that the Federal Reserve is gearing up to hike interest rates at its December meeting.
According to Investing.com's Fed Rate Monitor Tool, investors are pricing in a 60% chance of a rate hike by December. November odds were at around 15%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 96.25 early Thursday, not far from a two-month peak of 96.38.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.