Gold prices slipped on Thursday as the dollar firmed and equities rose ahead of economic data that should bolster expectations of a US interest rate hike. Spot gold had dropped 0.2 percent to $1,264.30 an ounce by 0653 GMT. In the previous session, it touched its lowest since June 24 at $1,261.59. US gold futures fell 0.1 percent to $1,267.10 an ounce.
"A surprise on the upside (of the labour numbers) will make market watchers expect an even higher probability of a rate hike and that could bring gold prices down," said OCBC Bank analyst Barnabas Gan. "I would advise to buy on dips for gold simply because the fall in gold prices is very much driven by very short-term factors: like a higher probability of a Fed rate hike and higher oil prices," Gan said, who has kept his year-end forecast of $1,350 an ounce.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. "The selloff in gold may not have ended yet," HSBC analyst James Steel said in a note.