In an interview on Tuesday, Fischer added that the US job market is almost at full strength, and said the pace of interest rate increases by the Fed will depend on how well the economy is doing.
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Technical selling, earlier strength in the U.S. dollar and rate rise speculation have been behind gold’s weakness, Commerzbank analyst Carsten Fritsch said, adding that it was nearing the psychologically key $US1,300 level.
Gold for December settlement on the Comex division of the New York Mercantile Exchange was last down $5.50 or 0.4 percent to $1,311.0 per ounce – the lowest since June 23.
Gold’s gains in 2016 have been dented after Federal Reserve officials indicated a greater likelihood of further monetary tightening before the end of the year.
Omer Esiner of Commonwealth Foreign Exchange said he expected fluctuations to remain within a narrow range in advance of Friday’s official figures on July US job creation.
Payroll processing firm ADP said that non-farm private employment rose by 177,000 in August, beating expectations of an increase of 175,000. “This unfortunately means that the gold market will continue to act in an unseemly fashion and that we will all have to trade it accordingly”, said David Govett, head of precious metals at Marex Spectron. Still, the rate of inflows have slowed.
Spot gold was down 0.3 percent at $1,318.77 an ounce at 1400 GMT, while US gold futures for December delivery were down $6.10 an ounce at $1,321.10.
A rate rise would likely have an adverse effect on gold as it increases the opportunity cost of holding non-yielding assets such as bullion.
In other data, Chicago PMI for August disappointed at 51.5, missing the 54.1 estimate.
Silver edged higher 0.7 per cent to $18.69 an ounce. Platinum gained 0.5 percent to $1,056.90, having touched an eight-week low of $1,048 on Tuesday.
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Spot gold may retest a support at $1,308 per ounce, with a good chance of breaking below this level, and falling more to the next support at $1,303, according to Reuters technical analyst Wang Tao.
