By Ambar Warrick 

-- Gold prices fell further on Thursday as the U.S. dollar gained ahead of key payrolls data due this week, while copper prices sank on growing concerns over a global economic slowdown. 

Spot gold fell 0.3% to $1,706.26 an ounce by 20:45 ET (00:45 GMT), touching its weakest level since late-July. Gold futures sank 0.5% to $1,716.75 an ounce. Both instruments are down substantially over the past five months, as rising U.S. interest rates boosted the dollar and Treasury yields.

Bullion prices retreated this week, while the dollar stuck to 20-year highs ahead of key U.S. nonfarm payrolls data due on Friday. The dollar index rose 0.3% on Thursday. 

While U.S. payrolls are expected to be lower in August than the prior month, a stronger-than-expected reading could give the Federal Reserve more space to hike interest rates aggressively this year. 

Data on Wednesday, however, showed that U.S. private payrolls grew substantially less than expected in August, indicating that the labor market may be cooling.

Still, hawkish comments from Fed Chair Jerome Powell last week saw gold and most other metals lose substantially in the past three sessions. Investors are penciling in an over 70% chance that the Fed will hike interest rates by 75 basis points later in September. 

Other precious metals also retreated. Platinum sank 0.9%, while silver futures slumped 1.5%.

Among industrial metals, copper futures fell 0.7% to $3.4880 a pound, extending losses into a fifth straight session as concerns over a global recession continued to grow. 

The red metal fell sharply on Wednesday after data showed Chinese manufacturing activity shrank for a second straight month in August.

Weak economic readings from Germany and Japan, coupled with surging inflation in the euro zone also trumped up concerns over slowing economic activity, denting the demand for copper.