Gold last traded down 0.5 percent at USD 1,217.06 an ounce after falling to a low of USD 1,215.49 earlier in the session - its lowest since early July.
Singapore: Gold hit a fresh 5-month low on Wednesday as investors awaited more U.S. economic data due later this week to gauge the outlook for Federal Reserve bond purchases that have boosted bullion's appeal as a hedge against inflation.
The metal has been under pressure as markets believe a recovering economy could prompt the Fed to slow the pace of its USD 85 billion in monthly bond purchases from this month.
Spot gold had eased 0.5 percent to USD 1,217.06 an ounce by 0756 GMT. It fell to a low of USD 1,215.49 earlier in the session - its lowest since early July.
The metal has hit a fresh five-month low in every session this week.
Analysts say prices are set to decline further, most likely to below USD 1,200 an ounce as there are no supporting factors.
"The failure to go any higher than USD 1,226 per ounce (in the previous session) despite a weaker dollar is yet another sign of weakness," said Joyce Liu, investment analyst at Phillip Futures Pte Ltd.
"Prices are likely to continue trading in a tight range below USD 1,226. There is a lack of support at least until USD 1,195."
Data on U.S. GDP and nonfarm payrolls is expected later this week and should provide clues about the stimulus outlook just ahead of the Fed's next policy meeting in Dec. 17-18.
The Fed's money-printing for bond purchases has played a key role in pushing gold prices higher over the last few years.
However, a recovering U.S. economy has prompted talk of an end to the stimulus measures and a shifting of investor money to equities from safe-haven gold.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.80 tonnes on Tuesday to 841.41 tonnes - their lowest since early 2009.
A record outflow from the fund this year of 460 tonnes has helped fuel a 27 percent decline in gold prices since the start of the year.
Physical buying, which tends to provide a floor to prices, has failed to pick up in a big way in recent weeks as most consumers had bought a lot more than necessary during earlier price drops this year.
They are now waiting on the sidelines expecting further declines in prices, according to dealers.