Gold hit a 2-1/2 week low on Monday as the dollar rose ahead of a two day Federal Reserve meeting and global equities surged.
The dollar hit an eight week high against the yen as data showing a pick up in U.S. consumer prices increased bets the Fed could raise interest rates again in December.
Investors also expect the Fed will announce plans to start trimming its balance sheet at its meeting on Tuesday and Wednesday in a move that should support the dollar and weigh on dollar-priced gold.
World stocks hit a record high ahead of the Fed meeting, with investors favouring risky assets ahead of perceived safe havens such as gold.
Spot gold was down 0.6 percent at $1,311.51 an ounce by 1346 GMT, having earlier touched $1,309.63, its lowest since Aug. 31.
U.S. gold futures for December delivery fell 0.8 percent to $1,314.90.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.