Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as the US dollar strengthened.
The most active gold contract for December delivery fell 16.80 US dollars, or 0.87 per cent, to close at 1,919.80 dollars per ounce.
The US dollar index has risen to a 10-month high, and US Treasury yields at a 16-year peak.
In an event held by the Wharton School of the University of Pennsylvania on Monday, Minneapolis Federal Reserve Bank President Neel Kashkari said that given the surprising resilience of the US economy, the Fed probably needs to raise borrowing rates further and keep them high for some time to bring inflation back down to 2 per cent.
Economic data released Tuesday were mixed. The Conference Board's consumer confidence fell for the second month in a row to 103 in September, below economists' consensus for a reading of 105 and August's upwardly revised reading of 108.7.
The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, grew one per cent year on year in July, up from a 0 per cent change in June.
The US Commerce Department reported that US sales of newly built homes fell 8.7 per cent in August from July to a seasonally adjusted annualized pace of 675,000 units. This is the slowest pace since March.
Investors are awaiting the release of the personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, on Friday.
Silver for December delivery fell 18.90 cents, or 0.81 per cent, to close at 23.196 dollars per ounce. Platinum for October delivery fell 10.40 dollars, or 1.13 per cent, to close at 907.10 dollars per ounce.
