Gold edged higher early on Wednesday, after falling 3.3 per cent in the prior session to its lowest in more than three months, as the dollar eased back and equities fell.
Spot gold was up 0.3 per cent at $1,271.44 an ounce by 0115 GMT, while US gold futures rose 0.3 per cent to $1,273.50 an ounce after falling over 3 per cent in the previous session.
Spot gold fell 3.3 per cent to a low of 1,266.33 on Tuesday, its biggest one day percentage drop since September 2013 after a report of a possible tapering of bond purchases sooner than expected by the European Central Bank.
Bloomberg had reported on Tuesday that the European Central Bank would probably wind down its €80-billion ($90-billion) monthly bond purchases gradually before ending its quantitative easing programme, citing unnamed officials at euro zone countries' central banks.
ECB media officer Michael Steen later tweeted that the central bank's decision-making body has not discussed reducing the pace of its monthly bond buying.
The dollar index, which tracks the currency against a basket of major peers, fell 0.1 per cent to 96.049.
Asian shares edged lower on Wednesday and bond yields were near two-week highs.
Richmond Federal Reserve President Jeffrey Lacker said he would have voted in favour of an interest rate hike at the Fed’s September policy meeting had he been able to vote, reflecting the growing pressure on Fed Chair Janet Yellen to raise rates.
IMF growth forecast
The International Monetary Fund had maintained its forecast for weak global growth on Tuesday and warned that further stagnation will fuel more populist sentiment against trade and immigration that would stifle activity, productivity and innovation.
Barrick Gold Corp had said on Tuesday normal operations had resumed at its Veladero mine in Argentina.
Work at Sibanye Gold’s South African Cooke mine has been suspended after two members of the National Union of Mineworkers were left in a critical condition after being attacked.