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.
Markets are pricing in a 76 percent chance the Fed will raise borrowing costs in December, compared with less than 20 percent only a month ago.
Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion versus the dollar.
Strong U.S. data on durable goods orders also pressured gold, Melek said.
"That generally has traders confident that the U.S. economy is actually doing OK. That implies that the Fed may be ready to hike the rates," Melek said of U.S. durable goods orders.
Profit-taking "from shorter-term technically-oriented traders" also weighed on gold, said Jeffrey Christian, managing partner of CPM Group in New York.
U.S. stocks pared gains Wednesday after U.S. President Donald Trump's administration called for slashing tax rates.
Despite its headwinds, lingering U.S.-North Korea tensions limited losses in gold, said Yuichi Ikemizu at ICBC Standard Bank in Tokyo.
"I think the [North Korea] situation is more serious than the Fed's policies. So gold is supported around here and I expect prices to go back up to $1,300."
Silver was nearly flat at $16.755 per ounce, having dropped 2.4 percent in the previous session, its biggest one day fall since mid-August. Earlier, the metal hit its lowest since mid-August at $16.69.
Platinum fell 0.49 percent at $917.49 per ounce, after hitting $912.50, its lowest since mid-July.
Palladium rose 1.58 percent to $928.40 per ounce.