Gold ended lower on Thursday as the dollar firmed after the European Central Bank kept rates on hold and pledged to use unconventional measures to combat low inflation, while an expected improvement in U.S. jobs data remained the main focus.
The ECB held its main interest rate at a record low of 0.25 percent, but its chief Mario Draghi reiterated that further monetary policy easing should not be excluded.
for June delivery fell settled $6.20 lower at $1,284.60 an ounce.
Meanwhile, spot gold lost 0.3 percent to $1,285 an ounce, within reach of a seven-week low of $1,277.29 hit on Tuesday.
"The monetary policy of the FOMC and the ECB are likely to remain the major driver for gold in the medium term for their impact on the currencies and stock markets," Peter Fertig, director of Quantitative Commodity Research said.
The dollar rose 0.4 percent against a basket of currencies, buoyed by a softer euro.
Although the number of Americans filing new claims for unemployment benefits increased more than expected last week, investors focused on the underlying trend that continued to point to some strength in the labour market.
The biggest data event for the market remains Friday's payrolls for March, which is expected to show that the underperformance seen in the previous two months was down to extreme cold weather conditions.
"A stronger U.S. jobs number tomorrow will be seen as the final sign that previous weakness in the data was down to bad weather and that the economy is on the recovery path," MKS SA head of trading Afshin Nabavi said.
A positive jobs report could further bolster the dollar, making gold more expensive for holders of other currencies.
The effect of any strong U.S. data on gold could, however, be mitigated by Federal Reserve chair Janet Yellen's recent defence of the Fed's easy monetary policy, analysts said.
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