Investing.com - Gold prices inched higher on Wednesday, as investors awaited 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. was to release the ADP jobs report for November at 8:15AM ET. Market players will also pay close attention to a speech by Federal Reserve Chair Janet Yellen on the U.S. economic outlook at 12:25PM ET.
Investors are also looking ahead to Friday's nonfarm payrolls report, the last jobs report before the Fed decides on interest rates at its December 15-16 meeting.
The outcome of Thursday’s European Central Bank meeting will also be in focus amid speculation the central bank could ramp up its monetary stimulus program.
Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $3.40, or 0.32%, to trade at $1,066.90 a troy ounce during European morning hours. A day earlier, prices dipped $1.80, or 0.17%.
Data released Tuesday showed that manufacturing activity in the U.S. contracted at the fastest pace since July 2009 in November. The downbeat data dampened optimism over the strength of the economy and fanned hopes the Fed could delay raising interest rates until next year
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.05% to 99.93, off an eight-month peak of 100.35 hit earlier in the week.
Gold fell to a six-year low of $1,051.60 last week, amid mounting expectations the Fed will raise rates for the first time in nearly a decade at its mid-December meeting.
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.
Meanwhile, silver futures for December delivery inched up 7.2 cents, or 0.51%, to trade at $14.15 a troy ounce. Prices hit $13.85 last week, the weakest since August 2009.
Elsewhere in metals trading, copper turned lower on Wednesday, as market players were disappointed by the size of supply cuts announced by Chinese metal producers, which was seen as too small to make a significant impact on an extremely oversupplied market.
Ten major copper smelters in China said they will scale back production by 350,000 metric tons next year. The group also called on the government to buy metal for its strategic stockpile.
A pair of disappointing manufacturing reports released Tuesday underlined concerns over the health of China's economy.
The downbeat data reinforced the view that the economy remains in the midst of a gradual slowdown which will require Beijing to roll out more support in coming months.
Copper is down almost 30% since May as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.