Gold resumes drop as robust U.S. data strength dollar

The precious metal traded lower for a third straight session on Wednesday after upbeat economic data from the U.S. pushed the dollar higher, thereby denting the appeal of the metal as an alternative investment.

Data released today from the U.S. showed that private sector employers added 212,000 jobs in February, while January’s reading was revised up to 250,000.  

The awaited non-farm payrolls data due on Friday may show American employers added 240,000 jobs last month.

Another report released today signaled a widening expansion in the U.S. services sector to 57.1 in February from 54.2 in January.  

Accordingly, the dollar index, which tracks the green currency’s movements versus a basket of major currencies, rose near an 11-month peak around 96.03. 

The progress in U.S. fundamentals is increasing the likelihood the Fed may raise interest rates earlier than predicted.

Yesterday, seven of the Fed members have mentioned they want to make the option of raising interest rates in June applicable, raising expectations the borrowing cost may rise before the second half of the year.