Gold prices slipped on Thursday as US Treasury yields edged higher after minutes of the Federal Reserve's December meeting signalled quicker interest rate hikes to tame high inflation.
Spot gold was down 0.2% to $1,805.98 per ounce by 0430 GMT. US gold futures fell 1% to $1,806.40.
"What the market has to be concerned with the end goal is how much the Fed is going to surprise going forward," said Stephen Innes, managing partner at SPI Asset Management.
"If it surprises with one more rate hike, that would be really negative for gold."
Spot gold may test resistance at $1,830
Fed officials said the "very tight" US labour market might warrant raising rates sooner than expected, as well as reducing the bank's overall asset holdings to control inflation, minutes of their Dec. 14-15 policy meeting showed.
Some investors view gold as a hedge against higher inflation, but the metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.
Benchmark US 10-year Treasury yields rose to their strongest level since April 2021, increasing the opportunity cost of holding gold.
The ADP National Employment report showed private US payrolls surged last month by more than double what economists polled by Reuters had forecast, potentially raising expectations for the non-farm payrolls numbers due on Friday.
"If we've a strong payroll print, gold will definitely go lower," Innes said.
Spot gold may test a support at $1,801 per ounce, following its failure to break a resistance at $1,830, according to Reuters' technical analyst Wang Tao.
Spot silver slipped 0.7% to $22.62 an ounce, platinum dipped 0.9% to $974.24, and palladium fell 0.6% to $1,853.74.
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