Gold fell to a more than 18-month low on Wednesday as the dollar climbed towards its highest in over a year on concerns about global market contagion triggered by recent declines in the Turkish lira.
Further gold liquidation from emerging markets to strengthen local currencies also pressured bullion, several traders said.
The advancing dollar and worries of continued oversupply also pushed platinum and palladium to their lowest since October 2008 and July 2017 respectively.
"The story for gold is very much about dollar strength and emerging market weakness," said Mitsubishi analyst Jonathan Butler.
"It's risk aversion, which is something that should be supportive of gold, but ... this is happening in an environment where the dollar is looking very strong relative to other major currencies and emerging market currencies."
Spot gold lost 1.3 percent at $1,178.33 per ounce, after hitting its lowest since early January 2017 at $1,174.35.
U.S. gold futures for December delivery settled down $15.70, or 1.3 percent, at $1,185 per ounce.
"There's some central bank selling (of gold) out of the emerging markets," said RJO Futures' Alex Turro. "The emerging markets are rolling over with the lira."
Bullion has declined about 9 percent this year, pressured by rising U.S. interest rates, a soaring dollar and failure to capitalize on its traditional role as a hedge against global uncertainties.
Investors have opted for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars, while bearish sentiment on gold led to liquidations in exchange-traded funds (ETFs) and a record level of short positions.
The dollar came off its highs later in trade, but was still near its highest level since June 2017 on worries over President Tayyip Erdogan's calls for lower interest rates and fraying ties between the United States and Turkey, a NATO ally.
Spot platinum slumped to its lowest since October 2008 at $752.25 per ounce. It was last trading down 3.3 percent at $771.80 per ounce. Palladium declined 5.2 percent at $850.10 per ounce, earlier hitting $834.50, its lowest since July 2017.
The world's top producer of platinum is South Africa, which saw the rand hit a two-year low this week, reducing costs for mining companies in the country.
"Most of the miners' costs are in rands and as the rand weakens further that is clearly working against mine closures," said Julius Baer analyst Carsten Menke.
Spot silver lost 3.3 percent at $14.46 an ounce after falling to its lowest since February 2016, at $14.32.