Gold dipped on Wednesday, losing momentum due to profit-taking after it soared by the most in over two months in the previous session on economic data that weakened the case for an imminent U.S. rate hike.
U.S. services sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slower economic growth that further diminished prospects for a near-term interest rate increase.
Meanwhile, U.S. non-manufacturing new orders index for August fell to their lowest since December 2013.
The spate of weak data has weakened the case for a U.S. rate hike immediately, boosting gold, which is highly exposed to interest rates and returns on other assets. Rising rates lift the opportunity cost of holding non-yielding bullion.