Gold traded lower due to a stronger U.S. dollar. The U.S. dollar rose against other major currencies after the release better-than-expected ISM non-manufacturing PMI. The index soared to 60.3 in July from 56.0 in June, exceeding expectations for an increase to 56.2. It was the highest level since August 2005.

A reading above 50 indicates a growth in the service sector.

The increase was driven by rises in in business activity, employment and new orders.

Earlier, gold price rose after the release of the ADP employment report. Private sector in the U.S. added 185,000 jobs in July, according the ADP report on Wednesday. June's figure was revised down to 229,000 jobs from a previous reading of 237,000 jobs.

Analysts expected the private sector to add 215,000 jobs.

"Job growth is strong, but it has moderated since the beginning of the year. Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown. Nonetheless, even at this slower pace of growth, the labour market is fast approaching full employment," the Chief Economist of Moody's Analytics Mark Zandi said.

Market participants are awaiting the release of the U.S. labour market data.

Gold price is under pressure due to speculation that the Fed may start raising its interest rate soon.

October futures for gold on the COMEX today declined to 1081.70 dollars per ounce.