Gold prices corrected to the downside in Asian trade on Wednesday as the US dollar began to recover some of its previous losses in anticipation of July’s employment report.
On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.65 percent to trade at $1,271.10 a troy ounce as of 05:00 GMT.
The yellow metal settled in green territory on Tuesday, supported by a weaker US dollar as economic reports presented a mixed scenario in terms of inflation and economic activity.
The core PCE price index came in at 1.5 percent in June, above an initially estimated 1.3 percent advance. Personal spending was aligned with analysts expectations of 0.1 percent.
Analysts pointed out that personal spending was unable to rise for the first time in seven months, which could be suggesting a weaker consumption in the current quarter.
In a separate report, the Institute for Supply Management said its manufacturing PMI index for July notched down to 56.3 from a previous reading of 57.8.
By the end of the session, gold futures for August delivery were trading around $1,272.410 a troy ounce, adding 0.46 percent and hitting a seven week peak.
These results did not contribute to boost speculation for a Federal Reserve interest rate hike by December, which according to the CME Group’s FedWatch tool currently stand at 42.5 percent.
Gold is sensitive to interest rate moves in the United States. A rising rates environment increases demand for US dollars and weighs on safe haven assets such as the precious metal.
The metal is also supported by the ongoing political turmoil in Washington as the Trump administration continues to change faces in its cabinet while the Russia case is still ongoing.