• Gold prices extended losses to a five-week low on Wednesday as the dollar gathered strength on the prospect of a U.S. interest rate hike.
• Spot gold was down 0.5 per cent at $US1,209.49 an ounce by 0659 AEDT (1959 GMT), after touching its lowest since Feb. 1 at $US1,206.05, putting it on track for its fifth straight session in the red.
• The most active gold contract for April delivery fell 6.7 U.S. dollars, or 0.55 percent, to settle at 1,209.40 dollars per ounce.
• Gold was put under pressure as the U.S.-based Automated Data Processing released a report on Wednesday showing an increase of 298,000 in private payrolls.
Analysts note this is the strongest reading of this measure since October 2015, and put extensive pressure on the precious metal as it raised expectations for the big jobs report due on Friday.
• "Non-farm payrolls ... will provide final confirmation of a rate hike next week and this could put more pressure on gold," Julius Baer commodities analyst Carsten Menke said.
• "Despite the recent sell-off we think that gold prices have been very resilient, given the circumstances," said Georgette Boele, precious metals analyst for ABN Amro, pointing to the rise in two-year-U.S. Treasury yields and strong U.S. equity markets.
• On the other hand, ETF Securities' Martin Arnold said he expected the backdrop of political risk in France and a lack of policy certainty in the United States to create support for gold prices as the interest rate increase was already priced in.
"And if the Fed doesn't follow up their tough talk with action then its certainly a bullish environment for gold," Arnold said, referring to expectations of three rate hikes this year.
• The U.S. Dollar Index rose by 0.26 percent to 102.08 as of 1800 GMT. The index is a measure of the dollar against a basket of major currencies.
• Analysts believe that the unexpectedly positive jobs data will have an impact on expectations for a Fed rate hike. Investors now believe the Fed may raise rates from 0.75 to 1.00 during the March FOMC meeting.
• According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 86 percent at the March meeting and 80percent for the May meeting, along with a 7 percent chance of an increase to a 1.0 rate.
• Traders are looking to the rest of the week for the Automated Data Processing employment report on Wednesday, weekly jobless claims report on Thursday, and the aforementioned big jobs report on Friday.
• Silver for May delivery dropped 23.8 cents, or 1.36 percent, to close at 17.298 dollars per ounce.
Reference: Xinhua, Business News
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