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Gold slipped further on Thursday as the dollar firmed on the back of strong economic data and Asian stocks ticked up ahead of the Bank of England's expected rate cut later in the day.

Investors bet the BoE would cut interest rates for the first time in more than seven years to ward off recession following Britain's vote in June to leave the European Union.

"We remain constructive on gold, at least going into Thursday's session where the BoE's expected easing could give the precious metal a bit of a lift," INTL FCStone analyst Edward Meir said in a note.

"However, we could run into some selling on Friday if the US non-farm payroll number exceeds estimates."

Gold backed ETFs have seen record inflows, adding 630 tonnes (US$25 billion) year-to-date (as of 7/31/2016), and bringing their collective global gold holdings to 2,240 tonnes. This is a substantial increase, but still 25% below their 2012 high.

World Gold Council said “A weak Japanese bond auction on August 2nd unnerved markets, pushing the gold price up 29% for the year in US dollar terms.

Many analysts are interpreting weak Japanese Government Bond demand as a signal that investors are starting to lose confidence in the effectiveness of unconventional monetary policies, following increasingly desperate bids by the world’s central banks to reflate the global economy.”

“In this environment, we believe investors are using gold to hedge portfolio risk as they add more stocks and low quality bonds to their asset mix” the council said.

Reference: World Gold Council, Reuters