Gold prices declined on Thursday, pulling back from a record high as investors locked in profits, while attention shifted to US jobs data for further insight into the Federal Reserve's policy path.
Spot gold was down 0.5% at $3,541.78 per ounce as of 1041 GMT, while US gold futures for December delivery dipped 1% to $3,600.90.
On Wednesday spot gold hit a record high of $3,578.50 amid rising bets for a US Federal Reserve rate cut and lingering geopolitical and economic uncertainties, Reuters reported.
"The market was way overbought and needed to correct," StoneX analyst Rhona O'Connell said.
The focus is now on weekly jobless claims and the ADP report due later in the day, and US non-farm payrolls data due on Friday.
"If the jobless claims are way out of line, then we could see a reaction (in prices) – down if below, up if high," O'Connell said.
A Labor Department report showed on Wednesday that job openings fell more than expected to 7.181 million in July. Meanwhile, several Fed officials said labour market worries continue to animate their beliefs that rate cuts are imminent.
The market is now pricing in a 98% chance of a 25 basis-point rate cut this month, CME Group's FedWatch tool showed.
Non-yielding gold typically performs well in a low interest-rate environment and in times of uncertainty.
Questions about Federal Reserve independence will take centre stage on Thursday when President Donald Trump's economic advisor Stephen Miran testifies at a Senate Banking Committee hearing on his nomination to the US central bank's seven-member governing board.
"Should private investors diversify more heavily into gold, we see potential upside to gold prices to well above our $4,000 mid-2026 baseline," Goldman Sachs said in a note.
Elsewhere, spot silver fell 0.6% to $40.95 per ounce, after hitting its highest since September 2011 on Wednesday. Platinum lost 2.2% to $1,390.10 and palladium shed 0.9% to $1,137.68.
