NEW YORK: Gold prices fell on Thursday as US economic data tempered expectations of an aggressive rate cut in November, while investors awaited the upcoming payrolls report for more clarity on the Federal Reserve’s monetary policy easing plans.

Spot gold was down 0.5% at $2,645.38 per ounce by 1125 GMT, after hitting a record high of $2,685.42 last week. US gold futures shed 0.2% to $2,665.70.

US private payrolls increased more than expected in September, evidence that labor market conditions were not deteriorating, according to data on Wednesday.

Richmond Federal Reserve President Thomas Barkin said the fight to return inflation to the central bank’s 2% target may take longer than expected and limit how much rates can be cut. Bets of a 50-basis-point rate cut in November fell to 34% from 49% last week, according to the CME FedWatch tool.

Meanwhile, Israel bombed Beirut on Thursday after its forces suffered their deadliest day on the Lebanese front in a year of clashes with Iran-backed Hezbollah. The strike comes a day after Iran fired more than 180 ballistic missiles at Israel.

“While there was some safe-haven buying following the announcement of the Iranian attack, the possibility that (US) rate cuts might not be as aggressive as anticipated likely limited the gains and continue to do so,” said Zain Vawda, market analyst at MarketPulse by OANDA. Non-yielding bullion is a preferred investment amid a low-interest rate environment as well as during times of geopolitical unrest. Market focus is now on the US non-farm payrolls report on Friday.

“A weak data print or uptick in unemployment could extend the upper end of the range for gold toward $2,700.

It will all depend on how weak the data is and its impact on rate cut expectations,” said Vawda. Spot silver fell 1.3% to $31.46, platinum dropped 1.7% to $985.25 and palladium slipped 2.2% to $991.79.