(RTTNews) - Gold prices dropped to a two-week low on Wednesday as the dollar strengthened. February gold ended at $770.50, down $12.80 for the day. The metal hit as low as $765.10 in early moves.

The dollar gained on other majors, pulling gold's hedge value lower. The greenback saw some strength against the euro ahead of the expected rate cut by the European Central Bank tomorrow. The buck also rose against the pound.

On the economic front, economic data showed that the pace of productivity growth in the third quarter was revised up to 1.3 percent from the preliminary reading of 1.1 percent growth, although it still reflects a slowdown compared to the 3.6 percent growth that was seen in the second quarter.

A separate U.S. report showed non-farm private employment fell by 250,000 jobs in November following a revised decrease of 179,000 jobs in October.

Later, the Institute for Supply Management said that its index of activity in the service sector fell to 37.3 in November from 44.4 in October, with a reading below 50 indicating a contraction in the sector. Economists had been expecting the index to show a more modest decline to a reading of 42.0.

In other commodity trading, crude oil closed at $46.79, down another 17 cents, extending its multi-year closing low. Traders shrugged off EIA data showing U.S. commercial crude oil inventories unexpectedly decreased 400,000 barrels in the week ended Nov. 28.

Gold prices edged slightly higher on Tuesday after a sharp sell-off on Monday. February gold closed at $783.30, up $6.50 on the session. The metal plunged more than $40 on Monday.

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