Gold hit a near-six-year low on Thursday, as the dollar soared after Federal Reserve chair Janet Yellen hinted at a US rate hike later this month and investors nervously awaited the European Central Bank's policy decision later in the day.

The European Central Bank (ECB) is expected to ease policy further and deliver a cocktail of measures that could include a deposit rate cut and changes to its asset-buying programme.

"(Although) the chances are pretty high the ECB could disappoint today, the market overall is positioned towards more US dollar strength, related to both the ECB and also to the Federal Reserve," Julius Baer analyst Carsten Menke said.

Spot gold fell to $1,045.85 an ounce, the lowest since February 2010 in earlier trade and was down 0.3 per cent at $1,050.31 by 1033 GMT. US gold futures slid to $1,045.40, the lowest since October 2009.

"Gold's technical signals are still unsupportive... however, the next two weeks will be all about the US rate 'liftoff', which is so widely expected," ActivTrades chief analyst Carlo Alberto de Casa said.

Fed Chair Yellen said on Wednesday she was "looking forward" to an interest rate rise that will be seen as a testament to the economy's recovery from recession.

Yellen expressed confidence in the U.S. economy, saying job growth through October suggested the labour market was healing even if not yet at full strength.

As a result, the dollar jumped to its highest in 12-1/2 years against a basket of major currencies on Wednesday. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

A rate hike at the December 15-16 policy meeting would be the first in nearly a decade. Gold, as a non-interest-paying asset, would not benefit from higher rates.

“Gold is likely to remain fragile and vulnerable to the downside as investor sentiment is clearly negative,” HSBC said in a note.

US nonfarm payrolls data on Friday will be keenly watched for more clues.

Investors are rapidly pulling out of bullion funds, adding to pressure on the metal.

Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 2.41 per cent to 639.02 tonnes on Wednesday, the lowest since September 2008.

The outflow is the biggest single-day percentage drop in four years.

Silver fell to its lowest since August 2009 at $13.79 an ounce, while platinum was unchanged on the day at $830.81 an ounce, after touching a seven-year low of $819.75.

Palladium bucked the trend, up 0.4 per cent at $526.30 an ounce. - Reuters