Spot gold was down 1.5% at $1,974.89 per ounce by 1026 GMT, while U.S. gold futures were down 1.7% to $1,984.90.
Benchmark U.S. Treasury yields rose to a near one-month high, pulling the dollar further above one-year lows that, in turn, made gold less affordable for buyers holding other currencies. The correction was due to the markets readjusting expectations of the Fed's rate-hike path, said Ole Hansen, head of commodity strategy at Saxo Bank, adding gold's rally has only been delayed as the market re-prices when rates would peak.on Tuesday that the U.S. central bank should continue raising rates as recent data showed inflation remains persistent.
Elsewhere, data showed euro zone inflation eased last month but underlying readings remained stubbornly high, with Britain's inflation being the highest in western Europe, fanning worries of higher rates by the