Gold prices dipped to a four-week low on Thursday as the dollar firmed after robust weekly jobless data from the United States while investors awaited clarity on the progress of U.S.-China trade talks.
Platinum jumped more than 1 percent to its highest since mid-June at $892.05 an ounce.
Spot gold was down 0.6 percent at $1,282.39 an ounce by 1349 GMT, having touched its lowest since March 5 at $1,280.59. U.S. gold futures fell 0.7 percent to $1,285.90.
“It’s really just been a dollar story. U.S. dollar is pressuring the gold market,” said Ryan McKay, commodity strategist at TD Securities, adding that strong weekly jobless data is also weighing on gold.
The dollar was up 0.2 percent against a basket of currencies , making gold expensive for holders of other currencies.
The number of Americans filing applications for unemployment benefits dropped to a more than 49-year low last week, pointing to sustained labour market strength despite slowing economic growth.
Analysts now await non-farm payrolls data on Friday for further clues on the strength of the U.S. economy.
In Europe, European Central Bank (ECB) policymakers debated the risk that ultra-low interest rates pose to banks when they met in March and decided to push back any rate increase to next year, minutes of the meeting showed.
In the short term, a dovish ECB is producing the stronger dollar dynamic and that is keeping a cap on gold here, McKay said, adding that dovish central banks will eventually be bullish for gold.
Investors are also closely watching developments in the U.S.-China trade conflict, with U.S. President Donald Trump expected to announce a date for a summit with Chinese President Xi Jinping.
“There is a lot of optimism around the idea that we will see a peaceful resolution and some agreement really soon,” said Michael McCarthy, chief market strategist at CMC Markets.
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell for a third straight session on Wednesday. Holdings were at their lowest since Dec. 17 at 24.57 million ounces.
Among other precious metals, spot platinum was last up 1.4 percent at $886.68 an ounce. The auto-catalyst metal jumped 3.4 percent in the previous session, the most in more than two years.
Platinum is gaining because of the combination of momentum after breaking the recent highs along with its relative value against gold and palladium, said Saxo Bank analyst Ole Hansen.
“We have hit technical resistance at $892. If prices close above $875, platinum will climb from here,” he said.
Palladium was down 2.3 percent at $1,372.65 and silver lost 1.3 percent to $14.94.