Gold traded near its lowest level since early April on Tuesday as the dollar strengthened in the wake of hawkish comments from Federal Reserve officials.
Improved risk sentiment amid optimism about a U.S. debt ceiling deal also weighed on bullion prices.
Spot gold fell 0.7 percent to $1,958.20 per ounce, while U.S. gold futures were down 0.9 percent at $1,959.85.
The dollar traded firm while yields on one-month U.S. Treasury bills jumped to a record high after Federal Reserve Bank of St. Louis President James Bullard backed two more interest-rate increases in 2023 and his Minneapolis colleague Neel Kashkari cautioned against reading too much into a June pause.
Meanwhile, the resumption of U.S. debt ceiling negotiations spurred some hopes that the U.S. may avoid a catastrophic debt default.
U.S. President Joe Biden and top Republican Kevin McCarthy have called their latest talks on the debt ceiling productive, although the talks over the weekend remained inconclusive.
In economic releases, U.S. final building permits for April, PMI reports for May and new home sales data for April are slated for release in the New York session.
Traders also look ahead to the release of reports on personal income and spending along with the minutes of the Fed's latest monetary policy meeting this week for additional clues on the economic and rate outlook.
