London: Gold slipped for an eighth consecutive day on Thursday, pressured by a firmer dollar ahead of US jobs data that could put the Federal Reserve on track to raise interest rates by year-end.

Spot gold was down 0.1 per cent at $1,265.33 (Dh4,643.76) an ounce by 1010 GMT. The metal posted its biggest daily loss in three years on Tuesday and touched its lowest since June 24 at $1,261.59 in the previous session after forecast-beating US manufacturing data and comments from Fed officials that there was a strong case for raising rates.

“Gold is falling on expectations that the Fed could now raise rates even twice before the end of the year and prospects of the European Central Bank eventually winding down its bond-buying programme,” said ActivTrades’ chief analyst Carlo Alberto de Casa.

Markets will now focus on Friday’s US nonfarm payrolls report, which is expected to show 175,000 jobs added, according to the median estimate of 100 economists polled by Reuters. This will be preceded by weekly jobless claims data on Thursday.

“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 has a year-end gold forecast of $1,350 an ounce.

Highly sensitive

Data this week showed that US services sector activity rebounded to an 11-month high in September, prompting traders to price in close to a 65 per cent chance of an interest-rate increase in December.

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.

Bullion was still on track for a 19 per cent increase this year, having benefited from uncertainty over the path of US rates.

It touched a two-year high of $1,374.91 in July as investors sought refuge from volatility across financial markets after Britain’s vote to leave the European Union.

Spot gold is expected to test support at $1,260 an ounce, a break below which could cause a loss to $1,250, said Reuters technical analyst Wang Tao.

Among other precious metals, silver was unchanged at $17.67 an ounce. It touched a low of $17.51 on Wednesday, its weakest since June.

Platinum fell 0.7 per cent to $968.25 after marking its lowest in more than three months in the previous session.

Palladium was down 0.4 per cent at $673.66.