The metal hit a one-week high of $1,192.10 on Wednesday, having held largely in a $50 range around $1,200 since mid-March.
"Strong U.S. data is a further sign that the U.S. economy is improving," Commerzbank analyst Daniel Briesemann said.
"If we get further good data and the dollar appreciates, we wouldn't rule out a fall to $1,100 over the next couple of months until the Fed starts raising interest rates.
Bullion prices remain under pressure in the longer term from expectations of a Federal Reserve rate rise this year, the first in nearly a decade. Rising U.S. rates lift the opportunity cost of holding non-yielding gold, and benefit the dollar.
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"The real story is the Fed. It's not a matter of whether they raise rates this fall or whether it's in the spring, it's just the fact that they're going to raise them," said Bill Baruch, chief market strategist for iiTrader in Chicago.
"Big funds managing positions are not looking to be big buyers of gold."
Gold was pressured by a stronger dollar, which rallied 0.6 percent against a basket of currencies after the U.S. numbers.
European and U.S. stocks came off session highs after the International Monetary Fund quit bailout talks with Greece, saying 'major differences' remained over an agreement to save the country from bankruptcy.
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Gold prices also faced pressure from outflows from gold-backed exchange-traded funds.
The world's biggest gold ETF, SPDR Gold Trust, said its holdings fell 0.2 percent to 704.23 tons on Wednesday, the lowest since September 2008.
Silver was up 0.2 percent at $16 an ounce, while platinum fell 0.7 percent to $1,102.25 an ounce andpalladium was up 0.1 percent at $742.75 an ounce.
Palladium earlier touched its lowest since April 1 at $736.00 an ounce.