Gold prices crept lower on Wednesday for the eighth consecutive session as elevated U.S. Treasury yields amid expectations that the Federal Reserve will keep interest rates higher for longer continued to weigh on investor sentiment.
Spot gold was down 0.1% at $1,821.69 per ounce, while U.S. gold futures settled 0.4% lower $1,834.80.
The benchmark U.S. 10-year bond yield scaled fresh 16-year highs, making non-yielding assets like gold less attractive.
"If the Fed continue to maintain rates at these levels, gold will continue to be under pressure. I even think prices can fall to $1,750 if they manage to break below $1,800," said Bob Haberkorn, senior market strategist at RJO Futures.
Gold prices briefly ticked up earlier in the session after U.S. private payrolls increased far less than expected in September.
Meanwhile, the U.S. services sector slowed in September as new orders fell to a nine-month low, but the pace remained consistent with expectations for solid economic growth in the third quarter.
Markets are now pricing in a 24% chance of another 25-basis point rate hike from the Fed this year, according to the CME FedWatch tool.
Focus will now be on the key non-farm payrolls report due on Friday for more clarity on Fed's rate-hike path.
"If the jobs report comes softer, then that will give gold ammunition to rally," Haberkorn said.
"Downside risks are likely to persist as the landing points for gold's key drivers remain uncertain. But we recommend those long (on) the metal to hold, as we expect a recovery," UBS said in a note, lowering its year-end gold price forecast by $100 to $1,850.
Gold losses came despite a softer dollar. The dollar index, which tracks the greenback against six peers, was down 0.2%.
Auto-catalyst metal palladium was down 1.7% at $1,169.40 after hitting its lowest since late 2018 earlier in the session.
Spot silver fell 0.7% to $20.9986 per ounce, while platinum lost 0.5% to $867.54.