Gold is currently at $1,095.60 (+0.14%) slightly above a 5-1/2-year low. U.S. employment data matched optimistic expectations suggesting the Federal Reserve could raise interest rates in September. Higher rates would be harmful for the non-interest bearing bullion; although some analysts believe that a minimum increase in U.S. rates is considered in current prices of gold.

Holdings of SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, dropped further to 21.47 million ounces, the lowest level since September 2008.