Gold fell on Thursday, retreating from a two-month high as an upbeat US jobs report hinting at steady economic recovery hurt the metal's appeal, while palladium held near an all-time high.

Spot gold fell 0.4% to $1,786.39 per ounce by 10:46 a.m EDT (1446 GMT), after hitting its highest since Feb. 25 at $1,797.67. US gold futures were down 0.4% at $1,786.20.

"You take the jobless claims numbers, coupled with where we're at from a technical standpoint, it's a little bit of a battle here," said Bob Haberkorn, senior market strategist at RJO Futures.

The downside in gold prices is likely to be short lived amid central banks buying and increasing demand for physical gold from China and India, Haberkorn added.

Switzerland in March recorded its biggest monthly gold exports in ten months as shipments to India jumped.

But clouding that outlook was a record COVID-19 surge in the country.

Dimming bullion's appeal was data showing a drop in claims for unemployment benefits last week, and a firmer dollar.

While the benchmark 10-year U.S. Treasury yield was pinned below 1.6%, further retreat could help gold breach the $1,800 mark, analysts said.

Bullion has dropped about 6% so far this year, mostly pressured by surging US yields that dulled the appeal of the non-yielding commodity.

Meanwhile, palladium eased off a record high of $2,891.50 per ounce and was last down 1.1% at $2,844.51.

"If you are long palladium and platinum right now, it's the perfect storm for price increases, because there's a very tight supply and the demand is increasing, especially from the auto sector," said Kevin Rich, Global Gold Market Advisor for The Perth Mint.

Many analysts expect a further run towards $3,000.

Silver fell 1% to $26.30 per ounce and platinum dipped 0.4% to $1,208.47.