Heightened expectations that the U.S. Federal Reserve will raise interest rates again this year drove gold to a one-month low on Wednesday, extending losses after the biggest one-day loss in almost two years during the previous session.
Palladium prices rose to a premium over platinum for the first time since 2001 as speculators piled into the market.
Spot gold was down 0.76 percent at $1,283.72 per ounce at 3:58 p.m. ET, earlier hitting its lowest since Aug. 25 at $1,282.23.
U.S. gold futures for December delivery settled down $13.90, or 1.16 percent, at $1,286.80 per ounce.
The U.S. dollar touched a one-month high against a basket of currencies after Federal Reserve chief Janet Yellen said on Tuesday it would be "imprudent" to keep rates on hold until U.S. inflation hits 2 percent.
That continued to pressure bullion prices into a second day, as traders awaited more statements from Fed officials this week.
"I think they will most likely tell us that the Fed is ready to pull the trigger, said Bart Melek, head of commodity strategy at TD Securities in Toronto, Canada.