The most active gold contract for February delivery fell 18.4 U.S. dollars, or 0.99 percent, to close at 1,840.6 dollars per ounce.
After rallying for four consecutive sessions to the highest level since June 10, traders are also taking profit.
Economic data released Thursday further dampened gold. The Automated Data Processing Inc. reported that U.S. employment in the nonfarm private sector increased by 235,000 in December from a 127,000 gain in November, better than expected.
The U.S. Labor Department reported that U.S. initial claims for state unemployment benefits decreased 19,000 to a seasonally adjusted 204,000 for the week ending Dec. 31, the lowest level since the end of September. Economists had forecast 225,000 claims for the latest week.
The S&P Global U.S. Services Purchasing Managers' Index (PMI) decreased to 44.7 in December from 46.2 in November, slightly up from its preliminary reading of 44.4 and below the 50.0 threshold. The change in the index level suggests that services activity weakened further.
Investors are awaiting the monthly U.S. nonfarm payrolls data due out on Friday.
Silver for March delivery fell 54 cents, or 2.25 percent, to close at 23.424 dollars per ounce. Platinum for April delivery fell 22.7 dollars, or 2.08 percent, to close at 1,069.6 dollars per ounce.
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