Gold fell to a more than 18-month low on Wednesday as the dollar climbed towards its highest in over a year on concerns about global market contagion triggered by recent declines in the Turkish lira.
The advancing dollar and worries of continued oversupply also pushed platinum and palladium to their lowest since November 2008 and July 2017 respectively.
Spot gold was down 1 percent at $1,181.41 an ounce by 1338 GMT, after hitting its lowest since early January 2017 at $1,180.48.
U.S. gold futures were down 1.1 percent at $1,187.70 an ounce.
"The story for gold is very much about dollar strength and emerging market weakness," said Mitsubishi analyst Jonathan Butler.
"It's risk aversion, which is something that should be supportive of gold, but ... this is happening in an environment where the dollar is looking very strong relative to other major currencies and emerging market currencies."
The yellow metal has declined about 9 percent this year, pressured by rising U.S. interest rates, a soaring dollar and a failure to capitalize on its traditional role as a hedge against global uncertainties.
Investors have opted for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars, while bearish sentiment on gold has led to liquidations in exchange-traded funds (ETFs) and a record level of short positions.
The dollar rose to its highest level since June 2017 on worries over President Tayyip Erdogan's calls for lower interest rates and fraying ties between the United States and Turkey, a NATO ally.
The greenback, in which gold is priced, has also been bolstered by a fall in the euro, which has been dogged by concerns over the European banks' exposure to Turkey.
Support is at a recent low of $1,191.80, followed by the $1,150 level, while resistance is at $1,219.60, ScotiaMocatta said in a note.
Spot platinum slumped to its lowest since November 2008 at $764 per ounce. It was last trading at $780, down 2.2 percent. Palladium was down 4.5 percent at $854, its lowest since July 2017.
The world's top producer of platinum is South Africa, which saw the rand hit a two-year low this week, reducing costs for mining companies in the country.
"Most of the miners' costs are in rands and as the rand weakens further that is clearly working against mine closures," said Julius Baer analyst Carsten Menke.
Spot silver was 1 percent lower at $14.80, after falling to its lowest since April 1 2016, at $14.76.
First Published: IST