Gold fell on Thursday as a strengthening dollar prompted some buyers to cash in gains after its biggest daily rise this month, briefly paring losses after downbeat U.S. jobs data.
Spot gold was down 0.82 percent at $1,266.85 an ounce. The metal had touched a 15-month high last week at $1,303.60, before slipping back below $1,300.
"The weakness in gold which we're experiencing today is mainly due to the strength in the dollar, and also we're approaching close to a very important level of $1,300," Naeem Aslam, chief market analyst at Think Forex, said.
The fell to a two-week low against the dollar on speculation that the Bank of Japan could expand its monetary stimulus as soon as next month, helping to lift the dollar index 0.35 percent.
Gold is up nearly 20 percent in 2016 as a run of soft economic data in the United States and around the world allayed expectations that the Federal Reserve would press ahead with interest rate hikes in the near term.
Rising rates increase the opportunity cost of holding non-yielding gold, while boosting the dollar, in which it is priced.
Underlining optimism towards the metal, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, rose to the highest since December 2013 on Wednesday. "Money flows are strong, the ETF demand is strong and this is all helping to keep prices in a range," said Bill O'Neill, co-founder of commodities investment firm Logic Advisors in New Jersey.
"We need to close above $1,300 to get the market moving from a technical perspective. That's a little bit of a stumbling block at the moment."
Surging inflows into gold-backed ETFs drove global gold demand to its highest first-quarter total on record this year at 1,290 tonnes, the World Gold Council (WGC) said, despite a near 20 percent drop in jewelry demand.
"It was pleasing to see the strong uptick in physical demand for gold in the first quarter of 2016 ... especially in Western financial centers that have effectively been absent for three years," Old Mutual Gold & Silver Fund manager Ned Naylor-Leyland said.
U.S. gold futures for June delivery settled down 0.3 percent at $1,271.20. Spot silver was down 1.9 percent at $17.07 an ounce, platinum was down 1.75 percent at $1,044.44, and palladium was down 2.23 percent at $591. GFMS analysts at Thomson Reuters said that platinum was likely to have already posted its lows for the year.