Gold prices snapped a four-session losing streak on Wednesday as bullion investors anticipated an upcoming report on jobless claims that could set the tone for the yellow metal in the near term.
Gold was up $4.52 Wednesday afternoon to trade at $2,388 per ounce as it clawed back from Monday's market sell-off. Silver, meanwhile, dipped into negative territory, down $0.06 at $26.78 per ounce.
A stronger dollar and higher Treasury yields were bringing pressure to bear on the precious metal, but the major driver was a report that China's central bank held off on purchasing gold for the third straight month.
At the end of July, the country's gold holdings stood at 72.8 million ounces – the same from the end of May and June – and the value of its gold reserves grew to more than $176 billion at the end of July from $169.7 billion at the end of June, according to report data.
"There has been some improvement in the appetite for gold in the West, but really, China does lead the way in this regard, and if they're not buying as much, then that's going to have a bigger impact on the aggregate global gold demand," Gainesville Coins chief marketing analyst Everett Millman told Reuters on Wednesday.
Investors will be closely watching Thursday's release of initial unemployment claims to gauge the overall health of the labor market.
On Friday, lackluster jobs data – which saw the unemployment rate rise to 4.3% and triggered the Sahm Rule, which is designed to signal the beginning of a recession – threw Wall Street into a tailspin.
Bullion traders are still optimistic the Fed will cut interest rates when policymakers meet in September.
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