A missile launch by North Korea prompted only a brief rally for gold, seen as a safe haven in times of uncertainty.
A stronger dollar makes gold more expensive for holders of other currencies and higher bond yields raise the opportunity cost of holding non-yielding bullion. Interest rate rises meanwhile lead to higher bond yields and tend to boost the dollar.
Spot gold was down 0.3 percent at $1,219.91 an ounce at 1359 GMT after earlier touching $1,217.14, the lowest since May 10.
US gold futures for August delivery were 0.1 percent up from Monday's close at $1,220.10 an ounce. US markets were closed on Tuesday.
"We've seen the dollar rebound from recent lows and treasury yields moving higher. That is a very powerful driver of the gold market," Julius Baer analyst Carsten Menke said.
Yields have risen sharply in recent weeks as several central banks signalled that they would tighten monetary policy, while Federal Reserve officials appeared undeterred by weak economic data and low inflation.
That has caused gold prices to tumble more than 3 percent from a high of $1,258.81 on June 23.
"If the Fed minutes confirm they are sticking to their outlook for the economy and their projection of higher rates going forward, this is not going to help the gold market," said Menke, predicting prices of $1,200 by the end of the year.
Investors were also looking ahead to employment data on Friday that could influence the pace of rate rises.
In the nearer term, analysts at Commerzbank said technical support for gold was around its May low of $1,214.
In other precious metals, silver was down 0.8 percent at $15.94 an ounce, trading consistently below the psychologically important level of $16 for the first time since January.
Platinum was 0.9 percent lower at $902.25 an ounce.
The metal used in jewellery and catalytic converters in the auto industry has fallen 25 percent from a high in August last year.
Strong technical support from fibonacci retracement and previous lows was between $902.39 and $890.49, analysts at JPMorgan said in a note. "(This) could potentially provide a base for a broader recovery if not a new up-trend," they said.
Palladium was down 1.8 percent at $836.25.