Gold sank to a five-week low on Thursday, with analysts expecting further losses as investors become increasingly certain that U.S. interest rates will rise this month.
Spot gold was down 0.32 percent at $1,203.58 per ounce. Earlier in the session, it hit $1,202.70, the lowest since Feb. 1.
U.S. gold futures eased $6.20 to settle at $1,203.20. Gold futures hit $1,202.90 earlier, the lowest level since Feb. 1 when gold traded as low as $1,199.70.
Strong U.S. economic data and comments by Federal Reserve officials have reinforced expectations of a March increase to U.S. rates.
Higher interest rates are likely to put pressure on gold prices because they raise the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
"You could see the price continuing to drop as more news comes out confirming what the market already knows," said Bernard Dahdah, metals analyst at Natixis.
"I wouldn't be surprised to see gold drop below $1,200 in the next few days."
February's U.S. private sector job growth numbers, released on Wednesday, showed the biggest jump for more than a year.
Investors are now awaiting February non-farm payrolls data on Friday as a barometer of the U.S. economy after Federal Reserve Chair Janet Yellen said last week the central bank was poised to lift rates, provided jobs and inflation data held up.
Her comments were seen as cementing plans for an increase at the Fed's March 14-15 meeting.
"If the (nonfarm payroll) data does come in better than market expectations, it will drag gold prices further," said OCBC analyst Barnabas Gan.
"But with fund futures fully pricing in the rate hike story, I'd presume gold will just be supported at the $1,200 handle into next week."
Interest rates futures implied traders saw an 86 percent chance of a rate hike next week on Wednesday, compared with 82 percent at Tuesday's close, according to CME Group's FedWatch program.
In other precious metals, silver fell 1.59 percent to $16.96, the lowest since Jan. 31.
Platinum dipped 0.85 percent to $936.50, the weakest since Jan. 5, while palladium slid 2.97 percent to $746.15.
"The shrinking price differential compared with platinum could slow palladium demand from the automotive industry," Commerzbank said in a note.