Gold prices extended declines to a two-week low on Wednesday as a sharp sell-off in equities forced a rush to cover margin calls, adding pressure on bullion ahead of keenly awaited non-farm payrolls data due later this week, reports Reuters.
Spot gold fell 0.8 per cent to $2,473.50 per ounce as of 0928 GMT, having hit its lowest since Aug. 22. US gold futures dipped 0.7 per cent to $2,505.40.
"Gold is under some light pressure this morning in the face of equities' weakness- this is normal as there may be some selling in case of equity-related margin calls," said StoneX analyst Rhona O'Connell.
"Other (precious metals) are down, partly in sympathy, but more likely in response to those dire numbers from the States yesterday."
US manufacturing contracted at a moderate pace in August amid some improvement in employment, but a further decline in new orders and rise in inventory suggested factory activity could remain subdued.
Shares across the world fell on Wednesday, pummelled by a drop in tech stocks after a record sell-off for US chipmaker Nvidia and as expectations of fading global growth hit riskier assets.
"Gold remains under pressure despite the risk-off mood... the precious metal could be exposed to further volatility on Wednesday due to the incoming US factory orders, JOLTS labour market data which may influence Fed cut expectations," said FXTM senior research analyst Lukman Otunuga.
"The major risk event this week is Friday's US jobs data. Given how investors may use this as a guide to how quickly or slowly the Fed will cut rates from September onwards, this data could rock gold prices."
Traders see a 39 per cent chance of a 50-basis-point (bp) rate cut on Sept. 18 and a 61 per cent chance of a 25-bp reduction, according to the CME Group's FedWatch Tool.
Elsewhere, spot silver fell 0.7 per cent to $27.87 per ounce. Platinum was steady at $904.05 and palladium lost 0.3 per cent to $936.
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