ADP report dampens optimism over U.S. economy's strength, sends gold higher

On Wednesday gold prices bounced off the lowest levels of the session, after data showed that U.S. non-farm private employment rose less than expected in July, dampening optimism over the strength of the economy and fanning hopes that the Federal Reserve could delay raising interest rates until the very end of 2015.

Comex gold futures for December delivery fell $1.00, or 0.09%, to trade at $1,089.70 a troy ounce during U.S. morning hours after hitting a session low of $1,083.40 overnight.

On Tuesday, gold rose $1.30, or 0.12%, to close at $1,090.70. Futures fell to a five-and-a-half year low of $1,072.30 on July 24. Gold prices lost $79.50, or 6.72%, in July, the biggest monthly decline since June 2013.

Elsewhere in the metals, October platinum lost $2.80, or 0.3%, to trade at $955.20 an ounce, after finishing at 958.50 an ounce Tuesday, while palladium gave up $1.80, or 0.3%, $596.80 an ounce.

High-grade copper was little changed at $2.36 a pound.

Earlier Wednesday, ADP said the U.S. private sector added only 185,000 jobs in July, versus expectations for 215,000.

The ADP number is a widely watched indicator of the Labor Department’s nonfarm payrolls number, expected Friday. The negative reading may be a sufficient reason for the Fed to delay hiking its interest rates.

Elsewhere, U.S. stocks opened higher, looking to end a three-day losing streak as earnings-driven by Priceline and First Solar helped push the S&P 500 higher.

The Dow Jones Industrial Average opened up, 7.69 points, or 0.1%, to 17,573.38, while the S&P 500 ticked higher nearly 10 points, or 0.5%, to 2,103.1, and the Nasdaq Composite Index jumped 26 points, or 0.5%, to 5,133.32.