Investing.com - Gold prices dropped to three-week lows in European morning hours on Friday, as traders eyed the release of upcoming U.S. jobs data as increasing expectations for a U.S. rate hike before the year end continued to lend support to the dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery lost 0.42% to $1,108.80.
The December contract ended Thursday's session 0.13% lower at $1,113.70 an ounce.
Futures were likely to find support at $1,103.00, the low from September 15 and resistance at $1,126.00, the high from September 30.
Investors were awaiting Friday's U.S. nonfarm payrolls report for September, which could help to provide clarity on the likelihood of a near-term interest rate hike by the Federal Reserve.
Gold had been pressured lower in recent months by uncertainty over when the Fed would hike interest rates from record-lows.
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.
The dollar came under mild selling pressure after after te Institute for Supply Management said on Thursday that its index of purchasing managers fell to 50.2 last month from a reading of 51.1 in August.
The report came shortly after the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending September 26 increased by 10,000 to 277,000 from the previous week’s total of 267,000, compared to expectations for a 3,000 rise.
Elsewhere in metals trading, silver futures for December delivery fell 0.28% to $14.470 a troy ounce, while copper futures for December delivery rose 0.21% to $2.309 a pound.