Global holdings in exchange-traded funds backed by the metal have dropped for 10 straight days, the longest slump since November. Policy makers are better off tightening earlier and more gradually than later and quickly, Fed Bank of Dallas President Richard Fisher said two days ago.

“People are starting to talk about the risk of a fed funds rate increase as early as June,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “It could get interesting, maybe not in a good way, for gold.”

Gold for immediate delivery fell 0.8 percent to $1,152.78 an ounce at 10:17 a.m. New York time, according to Bloomberg generic pricing. The price headed for an eighth straight drop, the longest slump since March 2009. Earlier, the metal touched $1,152.32, the lowest since Dec. 1.

Eoin Treacy's view

While the role of the inverse correlation between gold and the US Dollar is often overstated there is no denying that the pace of the greenback’s advance over the last two months has acted as a headwind for commodity prices. 

The Continuous Commodity Index moved to a new low today to extend the medium-term downtrend and a break in the almost yearlong progression of lower rally highs would be required to question the consistency of the decline. 

Platinum continues to trade below the price of gold which is an unusual circumstance and extended its decline today in nominal terms. 

Gold has fallen to test the region of the December lows near $1150 and a short-term oversold condition is evident. While there is scope for some steadying in this area a clear upward dynamic will be required to check momentum beyond a brief pause.