Gold struggled to pull away from a 5-1/2-year low on Thursday after more upbeat US economic data bolstered prospects that the Federal Reserve could lift interest rates as soon as next month. A surge in US services industry activity to a near-decade high suggested solid economic momentum that strengthens the case for a US interest rate hike this year, the first since 2006.
Investors will be eyeing US nonfarm payrolls data due on Friday, with economists polled by Reuters predicting employment in July to have increased at the same pace as June's 223,000 rise. A strong US employment report could send gold below $1,080, he said. Spot gold was up 0.1 percent at $1,086.20 an ounce by 0633 GMT. The metal has been stuck below $1,100 since breaching that support level after a deep rout in late July that pushed it as far as $1,077, its weakest since February 2010.
US gold for December delivery was flat at $1,085.70 an ounce. Expectations that the Fed could increase rates at its next policy meeting in September grew louder this week after Atlanta Federal Reserve President Dennis Lockhart said only a "significant deterioration" in the US economy would make him not support a rate hike next month.
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