Gold pared gains after it rallied to a two-year peak as the U.S. Federal Reserve sounded a less dovish note after its latest policy meeting, with the metal reaching three-year highs in euro and sterling terms ahead of Britain's vote on whether to leave the European Union.
The June 23 referendum has dented appetite for assets viewed as higher risk and sent investors scurrying for bonds and gold.
was down 0.43 percent at $1,285.81 an ounce, falling below the psychologically key level of $1,300 an ounce. U.S. gold futures for August delivery settled up $10.10 at $1,298.40, and last gained 80 cents to $1,289.10. Spot prices have bounced 7 percent this month after sliding to a 3-1/2 month low on May 30.
"So far so good, but the $1,307 level needs to be taken out on a close basis to set up a move to $1,322," wrote Peter Hug, global trading director at Kitco Metals, in a research note.
Sterling-denominated gold rose 2 percent to a three-year high of 931.27 pounds an ounce, while gold priced in euros reached its highest since April 2013 at 1,176.22 euros.
Expectations that the U.S. central bank would press ahead with interest rate increases over the summer faded earlier this month after the release of weak U.S. payrolls data for May.
"The U.S. job report took us from the lows on June 3. Brexit worries then gave us the next boost and yesterday the FOMC provided enough dovish ammunition for it to make a new high," said Saxo Bank's head of commodity research, Ole Hansen.
The Fed signaled on Wednesday that it still plans to raise rates twice this year but said that slower economic growth would crimp the pace of tightening in future years.
That sparked a jump in the price of gold, which is highly sensitive to rising rates that lift the opportunity cost of holding non-yielding assets such as bullion while boosting the dollar, in which it is priced.
"The longer the Fed is seen as delaying a rate hike, the better for gold," HSBC said in a note.
Momentum picked up further after the Bank of Japan held off from expanding monetary stimulus, prompting a more than 2 percent rally in the yen versus the dollar.
The U.S. currency was later up nearly 1 percent against the euro, while European shares hit a four-month low and oil prices headed for a sixth session of losses.
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares Trust, rose 0.23 percent to 900.75 tonnes on Wednesday, the highest since October 2013.
Among other precious metals, silver futures fell 0.22 percent to $17.47 an ounce, platinum futures lost 0.3 percent to $972.20 and palladium futures were up 0.37 percent at $534.50.