Gold dropped below the key $2,000 level on Wednesday as a five-session sell-off in the U.S. dollar paused, and the Federal Open Market Committee expressed concern at their last meeting over the future of the economy.
Spot gold was down 1.6% to $1,968.84 per ounce, while U.S. gold futures slipped 1.7% to $1,979.20.
"The dollar is brushing up against some very strong resistance and we're going to need a strong signal from the Fed to see the next wave of selling pressure to hit the dollar," said Edward Moya, senior market analyst at broker OANDA.
Fed minutes showed the FOMC believes that the coronavirus likely would continue to stunt growth and potentially pose dangers to the financial system.
Widespread stimulus measures and a low interest rate environment pushed gold prices to an all-time peak on Aug. 7, but bullion has pared gains since then.
Gold was also pressured as a senior Trump administration official said a smaller coronavirus relief bill worth around $500 billion could be reached, as opposed to one between $1 trillion and $3 trillion that had been previously expected.
The dollar ticked up, halting a slide that took it to more than a two-year low on Tuesday, while the S&P 500 equities index held near record highs.
Higher stock markets and the dollar's effort to stabilize are acting as short-term headwinds for gold, George Gero, managing director at RBC Wealth Management, said in a note.
However, he added any dips in gold will be bought on concerns over the global economy and increasing inflation expectations with more debt and stimulus.
Elsewhere, silver fell 1.2% to $27.30 per ounce. Platinum dropped 2% to $937.03 and palladium fell 1.5% to $2,156.78.