Gold prices hit by profit taking, stronger dollar

Gold lost some of its touted recent gains Wednesday, as the U.S. dollar index remains strong, enticing even more profit-taking pressure from the shorter-term traders.

Spot gold was last down $8.40 at $1,254.10 an ounce in New York, having hit a three-day low earlier in the session at $1,251.83 an ounce.

Gold has gained 18% in value since the start of the year, mostly thanks to market volatility and geopolitical concerns.

Until last week, negative macroeconomic sentiment and a weaker U.S. dollar had prompted the strongest two-month rally in gold since 2011.

The yellow metal has gained 18% in value since the start of the year, boosted by market volatility and geopolitical concerns. Bullion is considered a safe haven and prices rise in times of heightened risk as investors seek a stable asset in which to store their cash.

Expectations that the European Central Bank may loosen its monetary policy further on Thursday weakened the euro against the dollar.