"It's all about the Fed and it's also about the August jobs report this Friday", said Ninh Chung, head of portfolio management at SVB Asset Management in San Francisco.
Research group Markit said its United Kingdom manufacturing purchasing managers' index rose to a 10-month high of 53.3 this month from a reading of 48.2 in July. When the Fed was buying corporate bonds, companies were all too willing to take the money with interest rates at practically zero.
Gold was unlikely to break below $1,300 before Friday's data, he said. "Gold could fall below $1,300, even if the market is pricing in good jobs data tomorrow".
S&P 500 e-minis were up 1.25 points, or 0.06 percent, with 113,148 contracts traded. Analysts had expected jobless claims to rise by 4,000 to 265,000 last week. That's well below the 2 percent that many Fed policymakers and economists now expect.
"There is a consensus view that the US has reached full employment but that is ridiculous considering that broad measures of joblessness peg the actual jobless rate at 9.7% and this has barely budged in the past five months", notes Gluskin Sheff and Associates chief economist and strategist David Rosenberg. December gold lost $5.10 to settle at $1,311.40 an ounce.
As for other precious metals, Comex silver for September delivery was virtually unchanged at $18.630 per ounce.
Gold prices broke above the $1,300 per troy ounce level in Jun 2016 after Britain voted to leave the European Union (EU).
Markets yesterday had plenty to react to and not enough volume to cushion the blows.
"Gold prices are under pressure but attention is fixed on Friday's July unemployment data".
(Recasts; updates prices; adds comment, byline, NEW YORK dateline) * SPDR Gold holdings register first monthly dip in four months * Platinum, palladium hit multi-week lows By Marcy Nicholson and Clara Denina NEW YORK/LONDON, Sept 1 (Reuters) - Gold turned higher after tapping the lowest level in more than two months on Thursday, as the dollar fell on unexpectedly weak USA manufacturing data that raised doubts about the economy's strength.
"This mixed jobs report puts the Fed in a tricky situation", said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.
The US job market is almost at full strength and the pace of interest rate increases by the Federal Reserve will depend on how well the economy is doing, says Fed Vice Chairman Stanley Fischer. Whether the Fed would go depends on what the market does.
Worldwide oil giants have projected that oil prices will increase this year. This, coupled with a stronger dollar, sent WTI down 3.6% to settle at $44.70 a barrel. The pair has made session high at 1.1171 and hit lows at 1.1131 levels.
Treasuries ended the month weaker, with yields on the 10-year T-note nearly 11 basis points higher. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. At that rate, 2016 would be on pace for more than 2 million new jobs.