Investing.com - Gold prices struggled near seven-week lows on Thursday, as investors continued to cut holdings of the precious metal amid expectations the Federal Reserve will raise interest rates at its next meeting in December.
Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up $1.10, or 0.1%, to trade at $1,107.30 a troy ounce during European morning hours.
A day earlier, gold prices fell to $1,105.60, the lowest since September 15, after comments by Federal Reserve Chair Janet Yellen bolstered expectations for rate hike in December
Testifying before the House Financial Services Committee, Fed Chair Yellen described the U.S. economy as "performing well" and an interest rate hike in December as a "live possibility" if the economy stays on track.
The U.S. dollar rose against its major counterparts as expectations grew the Federal Reserve would tighten monetary policy in the coming months. Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
Investors now looked ahead to key U.S. data later in the day for further indications on the strength of the economy and the likelihood of a near-term interest rate hike.
The U.S. is to release a weekly report on initial jobless claims at 8:30AM ET Thursday, as well as data on nonfarm productivity and unit labor costs.
Market players are also focusing on Friday's U.S. nonfarm payrolls report. The consensus forecast is that the data will show jobs growth of 180,000 in October, following an increase of 142,000 in September, while the unemployment rate is forecast to hold steady at 5.1%.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could undermine the argument for an early rate hike.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December.
Gold had rallied in October as concerns over a global economic slowdown led by China and its impact on U.S. growth prospects had prompted market participants to push back expectations for a rate increase to March 2016.
But the Fed's hawkish statement last week forced market players to readjust expectations for higher interest rates to as early as December, triggering a sell-off in the bullion market.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange shed 2.5 cents, or 1.09%, to trade at $2.298 a pound during morning hours in London.