LONDON: Gold prices touched a more than three-week low on Thursday, as the dollar strengthened after Donald Trump's win in the U.S. presidential election, while focus was also on the Federal Reserve's interest rate decision later in the day.
Spot gold fell 0.1 per cent to US$2,656.34 per ounce, as of 0327 GMT, after hitting its lowest level since Oct. 15 earlier in the session.
Bullion hit a record high of US$2,790.15 last week and has lost more than US$130 since then.
U.S. gold futures shed 0.5 per cent to US$2,663.60.
The dollar index hovered near a four-month high, making bullion more expensive for overseas buyers.
Trump recaptured the White House with a sweeping victory on Wednesday, but it has fuelled questions about whether the Fed may proceed to cut rates at a slower and smaller pace.
Traders are anticipating a 25-basis-point cut likely to be announced at the end of the Fed's meeting later in the day, with focus also being on Chair Powell's statement for any guidance on the central bank's future rate-cut path.
Trump's potential policy is inflationary and that could translate to slower cuts, which is a rather negative news for gold, but a widening U.S. budget deficit and reduced fiscal discipline will be positive, said Kelvin Wong, OANDA's senior market analyst, Asia Pacific.
Bullion is considered a hedge against geopolitical and economic uncertainties but higher rates raise the opportunity cost of holding zero-yield bullion.
"I still think gold's path remains bullish as people would like to buy it as a safe-haven to shield against risks. Still expect prices to hit US$3,000 next year," said Peter Fung, head of dealing at Wing Fung Precious Metals.
Spot silver fell 0.4 per cent to US$31.03 per ounce, platinum slipped 0.3 per cent to US$983.73 and palladium declined 0.7 per cent to US$1,028.25. All three metals were down for a second straight session.