Gold fell to a three-week low on Thursday, weighed down by a stronger dollar as investors began to assess the potential for another U.S. rate hike later in the year, supported by data showing a strong U.S. jobs market.
The losses in gold were limited, however, with bullion underpinned by a myriad of global uncertainties, including a report that U.S. President Donald Trump was under investigation.
"Just like in previous rate hikes, the next day the market starts looking at the probability of the next hike because everything was factored in beforehand," Natixis metals analyst Bernard Dahdah said.
The U.S. Federal Reserve raised interest rates by a notch as expected on Wednesday and indicated further tightening before the end of the year.
"If you just look at economics, there's chance of more downside. The Fed was talking about another potential rate hike later this year, which is negative for gold. But there's still enough for people to worry about in geopolitics at different levels," Dahdah said.
Higher interest rates are negative for gold because they increase the opportunity cost of holding non-yielding gold by forgoing the chance of earning interest on cash holdings.