Gold settled higher on Wednesday, after ending lower for three consecutive sessions, but it was still near four week lows on fears that the Federal Reserve could hike U.S. interest rates sooner than expected.
Fed Chair Janet Yellen said on Tuesday the U.S. central bank could raise rates earlier or faster if hiring and wages take off in an unexpected way, though she signaled that the Fed will keep monetary policy loose until jobs data shows the effects of the financial crisis are "completely gone."
U.S. gold futures for August delivery settled $2.70 higher at $1,299.80 an ounce.
Meanwhile, spot gold edged up to $1,297 an ounce, after losing 3.3 percent in the last two sessions—the metal's biggest two-day loss since October. Traders said gold could have further to fall, especially as this week's $40 drop has failed to generate a robust pick-up in physical demand in Asia.
In China, the top consumer of gold, local premiums edged up to $1 an ounce on the Shanghai Gold Exchange from a small discount in the previous session.