Gold ended lower on Wednesday, erasing earlier when the dollar steadied after a series of U.S. economic data supported expectations the Federal Reserve will soon scale back monetary stimulus.
With the Thursday Thanksgiving holiday in the United States approaching, market activity is expected to slow and not pick up until next week, traders said.
Spot gold dropped 0.2 percent to $1,241 an ounce after rising nearly 1 percent earlier in the day. It lost nearly 1 percent in the previous session after strong U.S. housing data. U.S. gold futures settled $3.60 lower at $1,237.90 an ounce.
Technical analysts said that as long as gold remains below $1,300 it faces the risk of further declines.
The dollar edged up 0.1 percent against a basket of currencies after U.S. data showed weekly jobless claims had unexpectedly fallen.