Gold fell on Wednesday to hover near the recent 5-1/2 year low as the dollar firmed on US services sector data that revived expectations of a US interest rate rise as early as September. Spot gold was down 0.2 percent at $1,084.81 an ounce by 1431 GMT, while US gold for delivery in December fell 0.8 percent to $1,082.40 an ounce.
Spot prices had briefly rebounded after earlier US data showed private sector hiring in July had risen the least since April, which initially weighed on the dollar.
But a stronger-than-forecast private report on the US services sector in July pushed the dollar to a 2-month high and gold close to a late July low of $1,077, the weakest since February 2010.
The next main data event is US non-farm payrolls on Friday.
"The non-manufacturing ISM has outweighed the ADP number ... today has not changed the view that the Fed is on track to raise rates in September," Commerzbank analyst Daniel Briesemann said.
The prospect of a first US rate rise in nearly a decade was backed up by a Federal Reserve official on Tuesday. Atlanta Federal Reserve President Dennis Lockhart said it would take "significant deterioration" in the US economy for him to not support a rate rise in September, according to the Wall Street Journal.
This would increase the opportunity cost of holding the metal, an asset that does not earn interest. Bullion lost nearly seven percent in July.
"The five pillars that used to bolster the price of gold are now eroding: central bank demand has weakened, Indian consumption has also been weaker since 2013, US quantitative easing has ended, exchange-traded funds have become a source of supply because investors are selling and Chinese demand is not as strong as it used to be," Natixis analyst Bernard Dahdah said.
Platinum and palladium wallowed near multi-year lows on a global supply glut and prospects of sluggish demand from the automotive sector.
Spot platinum fell 0.6 percent to $945.25 an ounce, close to $940.50 on Tuesday, its lowest since February 2009. Palladium was up 0.4 percent at $595.47, after hitting a near three-year low of $586.33 in the previous session.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped further on Tuesday to 21.56 million ounces, the lowest since September 2008. Silver was steady at $14.58 an ounce.
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