Sentiment weakened further as the holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to 1012.25 tonnes, their lowest since February 2009.
Moreover, stronger greenback makes gold expensive for those holding other currencies, thus reducing demand. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, was trading 0.28 per cent higher at 84.334 on the Inter-Continental Exchange (ICE) at 11.08 am IST.
However, losses in the yellow metal were curbed as physical demand for gold has picked up in India, the biggest bullion consuming nation, due to the ongoing marriage season.
At the Commodity Exchange (COMEX), gold future for June 2013 delivery traded at US$1,386.5 per ounce, up by 0.55 per cent. It opened at US$1,379.9 against the previous closing price of US$1,378.9. It touched the intra-day high of US$1,389.6. (At 11.11 am IST).