Gold lost more ground on Wednesday as a rebound in stock markets reduced some of the precious metal's safe haven appeal with additional pressure from a strengthening greenback. Spot gold slid 0.8 percent to $1,081.80 an ounce by 0725 GMT and US gold futures fell 0.3 percent to $1,081.8. "The market is expecting, perhaps in March the Fed will have its second interest rate hike. It will lead to a very strong US dollar, so gold prices are likely to face pressure," said Shandong Gold Group chief analyst Shu Jiang.
The metal's rally in early January to a nine-week top has run out of steam as expectations of further US interest rate increase lowers demand for the non-interest-paying asset, while boosting the dollar. The Fed raised rates in December and attention has shifted to how many hikes will follow in 2016.
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