Gold futures extended a slump into an eighth consecutive session Thursday, sending the yellow metal to the lowest level since the start of February amid increasing confidence the Federal Reserve will raise interest rates at its upcoming policy meeting next week.

Comex gold futures touched a session low of $1,203.50 a troy ounce, a level not seen since February 1. It was last at $1,204.75 by 3:10AM ET (08:10GMT), down $4.55, or about 0.4%.

Spot gold was down $3.25 at $1,205.10 per ounce.

Robust U.S. private-sector payrolls data on Wednesday further cemented expectations for the Federal Reserve to raise interest rates next week.

Futures traders are pricing in around a 90% chance of a hike at the Fed's March 14-15 meeting, according to Investing.com’s Fed Rate Monitor Tool.

Investors are now awaiting Friday's nonfarm payrolls report for further clues on the likely pace of hikes this year.

Odds of a second rate hike in September currently stand at about 70%, while a third hike in December is priced in at almost 60%, aligning market expectations with the Fed's current forecast for three rate hikes in 2017.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 102.11 in London morning trade, not far from last week's two-month high of 102.27.

Treasury yields were higher, with the Fed-sensitive U.S. 2-Year note yield hovering near a more than seven-year peak of 1.37%, while the U.S. 10-Year bond yield was at 2.57%, its highest since December.

Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.