Gold prices held near three-week lows on Thursday after a larger-than-expected increase in US private payrolls in July fuelled bets on more monetary policy tightening and boosted the dollar and bond yields.

Spot gold was up 0.2% at $1,937.39 by 0400 GMT, trading near its lowest level since July 12 hit in the previous session. US gold futures fell 0.1% to $1,972.90 per ounce.

“This is a buying opportunity, though some further short-term volatility is possible especially as bond yields are expected to continue to climb,” said Clifford Bennett, chief economist at ACY Securities.

The US dollar index rose to a four-week peak on Wednesday and benchmark 10-year Treasury yields were at their highest since November after data showed US private payrolls rose by 324,000 jobs last month.

A Reuters poll had forecast private employment would increase by 189,000. On Friday, the US non-farm payrolls report for July will be scanned to see whether the Federal Reserve will need more rate hikes to cool inflation.

The Bank of England, meanwhile, is expected to raise rates to a 15-year high on Thursday.

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Non-yielding gold is often sought as a safe investment during times of economic uncertainty but tends to lose its sheen when rates rise.

Markets also digested Fitch’s downgrade of the US credit rating, with investors saying they expect long-term unease about the country’s debt position, political polarisation and the global standing of the dollar.

According to FX strategists polled by Reuters, the US dollar will hold its ground against most major currencies over the coming three months, which could potentially hurt dollar-priced bullion.

Spot silver was down 0.2% at $23.67 an ounce and platinum dropped 0.2% to $919.19. Both the metals were at their lowest levels in about three weeks. Palladium prices fell 0.2% to $1,240.51 per ounce.