Gold prices fell 1 percent on Tuesday, dropping below $1,300 an ounce as bullion investors focused on a US Federal Reserve monetary policy report showing the central bank is set to end its bond-buying stimulus in October. Gold posted its biggest two-day losses since October 1, having lost nearly 3.5 percent between Monday and Tuesday.
The metal briefly rose after Fed Chair Janet Yellen told a Senate committee that US labour markets are far from healthy and signalled the Fed will keep monetary policy loose until hiring and wage data show the effects of the financial crisis are "completely gone."
Spot gold was down 1 percent to $1,293.64 an ounce by 3:20 pm EDT (1920 GMT), having earlier dropped to $1,291.70, the lowest since June 19. US gold futures for August delivery settled down $9.60 to $1,297.10 an ounce, with trading volume about 30 percent above its 30-day average, preliminary Reuters data showed. Among other precious metals, platinum slipped by 0.6 percent to $1,478.50 an ounce, while palladium was down 0.4 percent to $864.08 an ounce and silver fell 0.8 percent to $20.72 an ounce.