Gold prices traded lower on 4 December after the US dollar rose to an over five-and-a-half-year high against a basket of major currencies.
The precious metal, however, managed to hold above the key $1,200-per-ounce level.
Spot gold was trading 0.31% lower to $1,204.90 an ounce at 0926 GMT, after rising nearly 1% in the previous session.
Traders were awaiting the European Central Bank's (ECB) policy decision on stimulus measures, expected at 1245 GMT, and the release of the US weekly jobless claims data, due out at 1330 GMT.
A Singapore-based precious metals trader told Reuters: "It's a wait-and-watch situation right now because there are some key events over the next two days. We have the ECB meet today and [US] nonfarm payrolls on [5 December], and both could potentially trigger big moves again.
"It looks like we will consolidate near $1,200 for now but the risks from the last few months remain."
HSBC said in a note to clients: "Much of the buying recently has been done by shorts exiting the market and not fresh longs entering the market or old longs extending positions."
The US dollar index hit an over five-and-a-half year high on 3 December after data showed that American private companies added 208,000 jobs in November and that the US services sector grew strongly.
Demand for dollar-denominated commodities such as gold typically weakens on a stronger greenback as it makes the metal more expensive for holders of other currencies and also lowers its hedge-appeal.
Gold prices have also been hit by weak oil prices as the metal is seen as a hedge against oil-driven inflation.