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Gold held near its lowest in over two months on Thursday, with investors waiting for data on U.S. jobs the next day for clues on the timing of a possible interest rate hike by the Federal Reserve.

"With Friday's U.S. payrolls data looming large, we are,seeing ranges tighten (for gold) and skew to the downside as anticipation builds for a potential September interest rate hike," said Sam Laughlin, precious metals trader with MKS PAMP Group. But he added that prices would unlikely break below $1,300 an ounce until Friday's payrolls release.

The ADP data “indicates that the momentum in the U.S. labor market recovery is continuing,” Vyanne Lai, an economist at National Australia Bank Ltd., said by e-mail. “A similar outcome from the U.S. non-farm payrolls number this Friday is likely to weigh on gold market sentiment.”

Bill Gross, the billionaire manager of the Janus Global Unconstrained Bond Fund, is recommending that the Fed raise interest rates twice by as early as March, with the first hike at this month’s meeting. Futures show a 36 percent chance of action then, up from 18 percent at the start of August.

Reference: Reuters, Bloomberg