Gold prices eased on Wednesday as the dollar ticked higher, while minutes from the Federal Reserve's July policy meeting highlighted that policymakers remained divided over the need for more rate hikes.
Spot gold dipped 0.2% at $1,897.00 per ounce by 2:15 p.m. EDT (1815 GMT), while U.S. gold futures settled 0.4% lower at $1,928.30.
The dollar index was up 0.2%, making bullion more expensive for overseas buyers.
Minutes for the Fed's July 25-26 meeting showed "some participants" citing the risks to the economy of pushing rates too far even as "most" policymakers continued to prioritize the battle against inflation, according to minutes of the session.
"The broader economic situation looks better than it did three months ago and inflation seems to be coming down the way the Fed wants, and in such a situation there is less need for safe havens like gold," said Everett Millman, chief market analyst at Gainesville Coins.
"The path of least resistance seems to be lower for gold right now."
Gold prices have dropped more than 8%, or over $170 per ounce, since scaling above the key $2,000 level in early May, as a rally in U.S. Treasury yields and a strong dollar took the shine off non-yielding bullion.
Indicating investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to its lowest level since January 2020.
Rising U.S. interest rates increase the opportunity cost of holding gold.
"The main factor slowing gold's decline is the lack of confidence in the health of the global economy with the latest data out of China adding to that negative sentiment," Rupert Rowling, a market analyst at Kinesis Money, said in a note.
Silver fell 0.2% to $22.47 an ounce, platinum lost 0.2% to $886.55 and palladium slipped 2.2% to $1,208.46.