Investing.com - Gold prices rebounded on Wednesday after declining more than 1% a day earlier as the dollar took a pause from its climb this week and investors prepared for a slew of events at the end of the week.
At 12:06 PM ET (16:06 GMT), gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell $3.60, or 0.30%, to $1,202.70 a troy ounce.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.47% to 95.52.
The dollar appeared to take a breather as market participants waited to see if U.S. President Donald Trump would slap tariffs on an additional $200 billion worth of imports from China as soon as Thursday, which would ratchet up the trade row with Beijing.
A weaker greenback makes the dollar-denominated metal more affordable for holders of foreign currencies.
Data overnight showed that business activity in China slowed in August, indicating that the trade dispute with the U.S. is hitting demand.
Trade talks between the U.S. and Canada resumed on Wednesday, with Trump threatening to leave Canada out of a new deal already negotiated with Mexico.
In U.S. economic data, the U.S. trade deficit increased to a five-month high in July, registering its largest increase in three years, as exports of soybeans and civilian aircraft declined and imports hit a record high.
Markets were shifting gears to the American labor market with the ADP monthly report on job creation and weekly initial jobless claims on Thursday to be followed by the official August monthly employment report at the end of the week.
The consensus forecast is for the creation of 191,000 jobs last month, while the unemployment rate is expected to hold steady at 3.9%.
With expectations pointing to another solid reading for the U.S. labor market, the report is not likely to move market expectations for the Federal Reserve to hike interest rates by a quarter point at the next policy meeting on Sept. 25-26.
Fed fund futures currently put the probability of an additional increase in December at nearly 76%, according to Investing.com’s Fed Rate Monitor Tool.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
In other metals trading, silver futures gained 0.47% at $11.947 a troy ounce by 12:07 PM ET (16:07 GMT).
Palladium futures fell 0.70% to $960.70 an ounce, while sister metal platinum traded up 0.60% at $782.90.
In base metals, copper rose 0.46% to $2.614 a pound.