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Gold hit a three-week low on Thursday, after falling more than 1 percent in the previous session, as investors looked to buy into rising equity markets rather than purchasing safe-haven assets.

Asian stocks climbed to nine-month highs on Thursday, helped by a pickup in capital inflows and a recovery in global oil prices, while the dollar stood strong on U.S. equity market gains.

A recent string of upbeat economic reports, including June housing starts, retail sales, ISM manufacturing and employment were all better than expected, suggesting that economic growth regained speed in the second quarter.

The bullish data could allow the Federal Reserve to raise interest rates much sooner than previously expected. Interest rate futures are currently pricing in a 19% chance of a rate hike by September. December odds were at 51%, compared with less than 20% a week ago and up from 9% at the start of this month.

"Stock markets are moving up which is not good for gold. We expect prices to scale down a little more. I don't think prices will stabilize before next week's U.S. Federal Reserve meeting," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

"With gold looking increasingly shaky on the charts, all eyes will turn to the ECB policy meeting. Should the central bank signal a more accommodative policy, we could see gold get a bit of a lift despite the fact that the dollar could strengthen as a result," said INTL FCStone analyst Edward Meir.

Reference: Reuters, Investing