Gold futures settled lower on Thursday as the dollar rose after data showed the U.S. economy improved in the second quarter, supporting views the Federal Reserve would lift rates by year-end.
The U.S. Commerce Department said gross domestic product expanded at a 2.3 percent annual rate. First-quarter GDP, previously reported to have shrunk at a 0.2 percent pace, was revised up to show it rising at a 0.6 percent rate.
U.S. gold futures for August delivery closed down $4.20 at $1,088.40 an ounce.
Spot gold dropped as much as 1.3 percent to a session low of $1,081.85 an ounce in earlier trade, not far from its cheapest since February 2010 at $1,077 hit after a selloff on July 20. It was last down 0.7 percent at $1,088 an ounce.
"$1,080 and $1,050 are critical technical support levels. I don't know if there are big stops below there but the market is nervous about a further bear raid and prices remain under pressure," bullion broker Sharps Pixley head Ross Norman said.
After a two-day meeting, Fed policymakers said the economy had overcome a first-quarter slowdown and was "expanding moderately." A Reuters poll showed the U.S. economy may have rebounded in the second quarter.
That buoyed the dollar, up 0.4 percent against a basket of leading currencies, making dollar-priced gold more costly for non-U.S. buyers.