Gold price fell as the U.S. dollar increased on comments by the European Central Bank (ECB) President Mario Draghi. He said that the central bank could extend its asset buying programme if needed, adding that the limit on sovereign bond ownership by the central bank will be raised to 33% from 25%.

The ECB lowered its economic growth and inflation forecasts.

The number of initial jobless claims in the week ending August 29 in the U.S. rose by 12,000 to 282,000 from 270,000 in the previous week. The previous week's figure was revised down from 271,000.

Analysts had expected the number of initial jobless claims to be 275,000.

Jobless claims remained below 300,000 the 18th straight week. This threshold is associated with the strengthening of the labour market.

Market participants are awaiting the release of the U.S. labour market. Official labour market data will be released tomorrow. Analysts expect that U.S. unemployment rate is expected to decline to 5.2% in August from 5.3% in July. The U.S. economy is expected to add 220,000 jobs in August, after adding 215,000 jobs in July.

October futures for gold on the COMEX today fell to 1120.50 dollars per ounce.