Gold slid more than 1 percent to a three-week low on Thursday, extending the previous day's decline, after minutes from the Federal Reserve's April policy meeting signaled that it could raise U.S. interest rates as soon as next month.
Downward pressure briefly increased after U.S. data showed the number of Americans filing for unemployment aid fell last week, the latest sign that the economy was regaining speed after stumbling in the first quarter. That lifted the dollar.
Spot gold was down 0.3 percent at $1,253.80 an ounce at, off an earlier low of $1,244.00, its weakest since April 28. It fell 1.7 percent on Wednesday.
U.S. gold futures for June delivery settled down 1.5 percent at $1,254.80 an ounce. The latest Fed minutes indicated that the U.S. central bank is likely to raise rates if data points to stronger second-quarter growth as well as firming inflation and employment.
"All commodities are getting hammered - silver is down 3 percent, oil down more than 2 percent," Commerzbank analyst Carsten Fritsch said. "It seems that a lot of speculative investments are being unwound, with the stronger U.S. dollar as excuse."