A hike at the Dec. 15-16 policy meeting would be the first in nearly a decade. Rising rates tend to weigh on gold, as they lift the opportunity cost of holding non-interest paying assets.
U.S. nonfarm payrolls data on Friday will be keenly watched for more clues on the direction of U.S. policy.
"(If) the labour market report tomorrow isn't as strong as expected, (we could see) some short covering in gold futures," Julius Baer analyst Carsten Menke said. "However, that does not change the longer term picture at all, that we are just in an environment where gold is not attractive."
The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares fell 2.41 percent to 639.02 tonnes on Wednesday, the lowest since September 2008. The outflow is the biggest single-day percentage drop in four years.
Silver was up 0.5 percent to $14.07, after hitting its lowest since August 2009 at $13.79 an ounce. Platinum was up 1.3 percent at $842 an ounce, after touching a seven-year low of $819.75, while palladium was up 0.9 percent at $531.55 an ounce.