Gold prices reversed early gains to trade slightly lower on Wednesday as the US dollar recovered from a three-year low against a basket of currencies. Spot gold was down 0.3 percent at $1,334.86 an ounce by 0641 GMT, after rising to $1,343.91 earlier in the session. It touched its strongest since September 8 at $1,344.44 on Monday.
US gold futures were down 0.1 percent at $1,335.40 an ounce. The dollar index was up 0.3 percent at 90.684, after dropping to its lowest since December, 2014 to 90.113 early in the session.
"Most of the move in gold has been dollar denominated ... We have seen very little change in ETF holdings. There is very little change in perception of gold in terms of safe haven demand," said Mark Keenan, global commodities strategist and head of research - Asia-Pacific at Societe Generale.
"The outlook for gold in our view is down due to the lack of physical demand in Asia and the outlook for rate hikes this year is a headwind for gold." Spot gold targets its September 8, 2017 high of $1,357.54 per ounce, as suggested by its wave pattern and a retracement analysis, according to Reuters technical analyst Wang Tao.