Gold futures edged lower midafternoon on Thursday as treasury yields and the dollar rose on further weak economic data, firming expectations the Federal Reserve will move to lower interest rates next month, though traders are awaiting a Friday speech from Fed Chair Jerome Powell for clearer signals on the central bank's intentions.

Gold for December delivery was last seen down US$6.40 to US$3,382.10 per ounce.

The U.S. Department of Labor reported initial jobless claims last week rose to 235,000, up from 224,000 a week earlier and ahead of expectations for 225,000 new claims, according to FactSet. Continuing claims rose to 1.97 million, the highest since November, 2021.

The weak data comes ahead of the Powell's Friday morning speech to the Fed's annual Jackson Hole Economic Policy Symposium in Wyoming. The central bank is widely expected to lower interest rates by 25 basis points at the Sept.17 end to the two-day meeting of the Fed's policy committee, even as inflation continues to run ahead of the bank's 2% target, clouding the outlook for a cut.

"Gold continues to trade within a narrowing range ... with traders showing limited risk appetite ahead of Powell's Jackson Hole speech on Friday and incoming U.S. economic data," Saxo Bank noted.

The dollar moved higher, with the ICE dollar index last seen up 0.37 points to 98.59. Treasury yields also rose, with the yield on the two-year note up 3.5 basis points to 3.802%, while the 10-year note was paying 4.332%, up 3.3 points.

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