Weakening physical demand and slowing speculative flows into gold, both of which began before the Fed meeting, could also help to drive a further pullback, Ghali added.
Spot gold fell 0.7pc to $1,863.98 per ounce by 1:43 p.m EDT (1743 GMT) after hitting its lowest level since May 17 at $1,848.49. U.S. gold futures settled 0.7pc down at $1,865.9.
Spot gold rose 0.8pc to $1,896.74 per ounce by 1:42 p.m. EDT (1742 GMT), having earlier hit its highest since Jan. 8 at $1,898.40. U.S. gold futures settled up 0.7pc at $1,898.
Spot gold may test a resistance at $1,847 per ounce, a break above which could lead to a gain to $1,876, according to Reuters technical analyst Wang Tao.
"Better economic data weighed on bonds, with yields subsequently rising and denting investor demand for the precious metal," ANZ analysts said in a note.
More than 141.67 million people have been reported to be infected by the novel coronavirus globally and 3,163,124? have died, according to a Reuters tally.
The U.S. dollar slipped to three-week lows after the data, making gold more appealing for holders of other currencies, while benchmark 10-year Treasury yields also ticked lower.