Gold prices edged lower on Thursday as the dollar held firm, while investors were cautious ahead of a US payrolls report that is expected to provide clues on the Federal Reserve's tapering timeline.
Spot gold fell 0.2% to $1,758.93 per ounce by 0345 GMT, while US gold futures were down 0.2% at $1,758.70.
The US dollar held close to a one-year high, buoyed by inflation concerns and expectations that the Fed would have to act sooner to normalise policy.
A stronger dollar makes gold less appealing for those holding other currencies.
"Central banks are in a very precarious situation as they watch inflation continue to pick up... Historically, it is good for gold, but it doesn't work that way in an environment where central banks are starting to shift into rate hike mode," said Stephen Innes, managing partner at SPI Asset Management.
"If we get a strong employment number and US yields move towards 1.6%, I think gold could trade down to $1,725."
Overnight, the yield on 10-year US Treasuries eased off a more than three-month high, but remained above 1.5%.
US nonfarm payrolls data, due on Friday, is expected to show an improvement in the labour market, which is likely to prompt the central bank to begin withdrawing pandemic-era support for the economy before year-end.
Expectations that the Fed would soon taper its massive bond purchases was bolstered by a strong private payrolls report for September released on Wednesday.
Reduced stimulus and higher interest rates lift bond yields, translating into increased opportunity costs of holding bullion that pays no interest.
Among other precious metals, spot silver fell 0.2% to $22.55 per ounce, platinum dropped 0.5% to $979.46, and palladium rose 1.1% to $1,910.38.