Gold was under pressure ahead of the meeting of the world’s central bankers at Jackson Hole in Wyoming.
Traders fear Federal Reserve chair Janet Yellen may use the meeting to indicate that US interest rates are going up.
Comments from vice-chairman of the Federal Reserve, Stanley Fischer, that US GDP growth would pick up in coming quarters added to the unease among gold bugs.
Precious metals tend to move in the opposite direction to US interest rates and “The market appears to be interpreting yesterday’s speech by Fed Vice Chairman Stanley Fischer as ‘hawkish’” said Commerzbank.
“According to the Fed Fund Futures, the probability of a US Federal Reserve rate hike this year is now at over 60% again,” it added.
The firm US dollar, rising bond yields and significantly higher rate hike expectations in the US are also weighing on silver, said the broker.
At US$18.91 per oz, the price is close to a seven-week low with the gold/silver ratio back above 70 again for the first time since the end of June.
A couple of hours in to US trading, spot gold was US$3 lower at US$1,338 having perked up a little since the start of the day.
Silver was 2% lower at US$18.91, while platinum shed US$6 to US$1,104.