Gold languished near a four-week low on Thursday, retaining sharp overnight losses, as strong US economic data and outflows from bullion-backed exchange traded funds sapped investor interest. Spot gold was little changed at $1,106.10 an ounce by 0637 GMT, after losing 1.4 percent in the previous session - its biggest daily drop since July 20. The metal slid to $1,101.11 on Wednesday, its lowest since August 11. US gold was up 0.3 percent at $1,105, but largely holding on to a 1.7 percent drop overnight.
Gold could see further weakness leading up to the Federal Reserve policy meeting on September 16-17, traders said. Prices could head back towards July lows as bullion broke through some key technical levels in Wednesday trade, said analysts at ScotiaMocatta. The July low of $1,077 for spot gold was the weakest since February 2010. "The $1,100 level should prop up gold during Asian trade today as physical names look to snap up the metal at these levels," said MKS Group trader Sam Laughlin.