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MTECHTIPS:-Gold edges higher but remains near 5-1/2 year low ahead of data

MTECHTIPS:-Gold edges higher but remains near 5-1/2 year low ahead of data

Gold prices turned higher in subdued trade on Tuesday, but held near a five-and-a-half year low amid ongoing expectations for a September U.S. rate hike. Gold futures for December delivery on the Comex division of the New York Mercantile Exchange inched up $3.90, or 0.36%, to trade at $1,093.30 a troy ounce during U.S. morning hours after fall by as much as 0.8% to a session low of $1,080.30 overnight. A day earlier, gold declined $5.70, or 0.52%, to close at $1,089.40. Futures fell to a five-and-a-half year low of $1,072.30 on July 24. Gold prices lost $79.50, or 6.72%, in July, the biggest monthly decline since June 2013. Investors looked ahead to the release of key data for further indications over the timing of a U.S. rate increase and the strength of the economy. The U.S. is to release data on factory orders at 10:00 AM ET on Tuesday. Market players are also focusing on Friday’s nonfarm payrolls report. The ADP employment report, considered a precursor to the nonfarm data, is due on Wednesday. Data on Monday showing that manufacturing activity weakened in July and consumer spending rose at its slowest pace in four months in June did little to alter expectations for a September rate hike. Gold has been under heavy selling pressure in recent weeks amid speculation the Federal Reserve will raise interest rates for the first time in nine years in the coming months. The central bank sounded more upbeat about the economy following its policy meeting last week, leaving the door open for an interest-rate hike as soon as September. 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.
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