Gold prices dipped to a fresh six-month low on Wednesday as the US dollar strengthened, making bullion more expensive for buyers using other currencies. Platinum also hit its lowest level since February 2016.
Gold prices have shed more than 3 percent this month - the biggest monthly loss since September - driven by a dollar rally, a large decline in gold held by exchange-traded funds and a sharp fall in speculative bets. Spot gold declined 0.3 percent at $1,255.17 per ounce by 1:35 pm EDT (1735 GMT), after hitting its lowest since mid-December at $1,252.04.
US gold futures for August delivery settled down $3.80, or 0.3 percent, at $1,256.10 per ounce.
Platinum lost 0.9 percent to trade at $857.40 per ounce after touching a more than one-year low at $848.50.
"The main focal point of the day will be the dollar and its pressure on gold," said David Meger, director of metals trading at High Ridge Futures.
Technical indicators suggest gold will continue to fall, said analysts at ScotiaMocatta, with support at the psychologically-important level of $1,250 then at $1,236.60, gold's December low.
A fall in holdings by gold-backed exchange traded funds tracked by Reuters also pressured gold.
But gold could rebound if investment funds that have trimmed net long positions in COMEX gold to the lowest in 2-1/2 years decide prices have bottomed, according to Julius Baer analyst Carsten Menke. Meanwhile, spot silver dropped 0.5 percent to $16.17 an ounce, while palladium declined 0.9 percent at $948.40.
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