Gold dipped for a fourth consecutive session on Tuesday as the dollar firmed and a lack of clarity over U.S. monetary and fiscal policy dented demand.
The Federal Reserve surprised markets last week by sticking with a programme of $85 billion in monthly asset purchases, confounding expectations for a $10 billion cut from September.
That triggered gains of around 4 percent in the gold price, but the metal has since fallen 3.2 percent over the past three sessions on renewed worries that the Fed could start making the cuts as soon as next month.
New York Fed President William Dudley has said that the U.S. central bank could still reduce its support for the economy later this year, while St. Louis Fed President James Bullard said that stimulus could be scaled back in October, depending on economic data.
"Gold continues to trade with global risk assets, which means that lack of investor appetite is still driving the market," VTB Capital analyst Andrey Kryuchenkov said.
"I think by year-end the market will be more sure of the macroeconomic situation, because tightening will be looming and will be possibly quicker than initially thought."
Spot gold was down 0.6 percent at $1,313.71 an ounce by 1222 GMT. U.S. gold futures for December delivery fell $13.20 an ounce to $1,313.80.
"On the topside for gold, we have the 50- and 100-day moving averages converging at $1,345, which should prove fairly stubborn resistance, and on the downside $1,290-$1,300 should prove solid support," MKS Capital trader Alex Thorndike said in a note.
Worries that money printing by central banks to buy assets will stoke inflation have helped boost the price of gold, which is often seen as an inflation hedge. The metal rallied to an 11-month high last October after the Fed announced its third round of aggressive economic stimulus.
Also weighing on the market on Tuesday was a slightly firmer dollar against a basket of currencies, which makes gold and other commodities priced in the U.S. currency more expensive for buyers in other countries.
WEAK PHYSICAL DEMAND
Gold premiums across Asia remained weak due to subdued physical demand ahead of what is typically a strong buying period for top consumers India and China as they head into wedding and festival seasons.
"You don't expect China physical demand to pick up at this point (because of high prices), and India is still awaiting more clarity on the imports' rules," VTB's Kryuchenkov said.
Moves by India to cut gold imports as it wrestles with its ballooning current account deficit have been keeping buyers at bay.
Gold importers in India are hoping that stocks sitting at airports will get customs clearance by Tuesday following a meeting with government officials last week.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.1 percent on Monday from Friday, having shed another tonne last week. That has brought its total outflow for the year to 440 tonnes.
In other precious metals, silver fell 0.4 percent to $21.52 an ounce.
Spot platinum rose 0.6 percent to $1,425.24 an ounce and spot palladium edged up 0.1 percent to $712.75 an ounce.
South Africa's Association of Mineworkers and Construction Union said on Tuesday its members at Anglo American Platinum would go on strike after the company said it would cut jobs. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Susan Fenton)