Bullion came under pressure on optimism over US economy which boosted the US dollar.
It seems gold has lost its safe haven appeal as investors are shifting their investments from gold to dollar and making commodities more expensive for holders of other currencies.
Federal Reserve may look at raising interest rates in the second half of next year which is considered bearish for gold, as the precious metal battles to compete with yield-bearing assets if rates are increased. International spot gold was seen trading at $1,190 an ounce.
Gold futures for December delivery on the Multi Commodity Exchange was seen trading at Rs 26,538 lower by Rs 173 at 3.15 pm IST. It touched an intra-day low of Rs 26,538.Check the gold rates here.
Growth in economic recovery across the globe is likely to see investors continuing to chase risky assets like equities and shunning gold.