Gold prices held mostly steady in Asia on Wednesday as investors took profits after a rally spurred by diminished expectations for a Fed rate hike this month.

Gold for December delivery on the Comex division of the New York Mercantile Exchange traded between small gains and losses around $1,353.75 a troy ounce.

Overnight, gold prices extended gains from Europe’s session in North American trade on Tuesday, touching a more than one-week high amid reduced expectations that the Federal Reserve will raise interest rates at its policy meeting later this month.

According to’s Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike at the Fed’s September 20-21 meeting in wake of last week’s disappointing U.S. employment data.

© Reuters.  Gold mostly flat in Asia

Investors returning from the long Labor Day weekend looked ahead to fresh economic data for more hints on the timing of a U.S. rate hike.

The U.S. Institute of Supply Management released data on August service sector activity that came in at 51.4, well below the 55.0 expected.

The data takes on extra importance after the ISM manufacturing survey published last week showed a shocking contraction in activity.

While expectations for a near-term rate hike have been scaled back, investors still believe the Fed will hike rates at least once before the end of the year, most likely in December.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.