Gold fell about 1 percent to its lowest in nearly four weeks on Thursday, shrugging off further weakness in the dollar, after the Federal Reserve signaled it was on track to raise U.S. interest rates again in December.
The metal is highly sensitive to rising U.S. rates, which boost the cost of holding non-yielding bullion relative to other assets, while lifting the dollar, in which it is priced.
Spot gold was down 0.79 percent at $1,290.73 an ounce by 3:55 p.m. EDT, having earlier touched its lowest since late August 25 at $1,287.61. U.S. gold futures for December delivery settled at $1,294, down 1.7 percent.
"It's follow through from yesterday ... I think the tone people are thinking about is that it's hawkish enough," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
"If we start to get healthcare legislation, tax policy, repatriation, that means better economic growth and that's a headwind for gold, so investors may be thinking that this is a reasonable time to be taking profits as we price in a December rate increase."
In a statement on Wednesday following its latest two-day policy meeting, the U.S. central bank indicated it still expected one more rate increase by the end of the year in spite of a recent run of soft inflation readings.
It also said it planned to trim the $4.2 trillion in asset holdings that it had built up in the wake of the 2008 financial crisis.
The dollar index, which tracks the greenback against a basket of six other currencies, fell 0.3 percent to 92.23.