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.
Spot 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.