Higher U.S. rates could mean further gains for the U.S. currency, which when it rises makes dollar-denominated commodities more expensive for holders of other currencies.
"A strengthening U.S. and global economy, the dollar going up, higher equities and rising U.S. bond yields are negative for gold," said Societe Generale analyst Robin Bhar.
"The Fed was more hawkish than we expected ... But it is surprising not to see some safe-haven buying after the events in Berlin and Turkey."
Higher U.S. Treasury yields mean it's cheaper for investors to buy U.S. government Treasuries, which like gold are seen as risk-free. But unlike gold which earns nothing and costs to insure and store, Treasuries earn regular coupons.
Investor confidence in the global economy can be seen in holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, which at 828.10 tonnes on
Monday is down more than 13 percent since Nov. 9.
Traders say some profit-taking on short positions could see gold recover over the next few days, but they expect any gains to be limited and short-lived.
Also weighing on gold is the prospect of weaker physical demand in top consumer India where retail demand has faltered due to the government's move to scrap high-value currency notes.