Credit: Reuters

Spot gold was down 0.3% at $2,324.88 per ounce by 14:01 p.m. (1801 GMT). U.S. gold futures settled 0.2% lower at $2,333.40.

The benchmark 10-year Treasury yield hit a one-month high on Monday and stayed elevated on Tuesday, making non-yielding bullion less attractive.

"The market is still highly sensitive to any discussion about interest rates or anything with regards to Fed policy. So, I think it's more still in a wait-and-see type momentum," said Phillip Streible, chief market strategist at Blue Line Futures.

The U.S. central bank still needs more data before cutting interest rates to ensure recent weaker inflation readings give a true picture of what is happening to underlying price pressures, Powell said.

Data on Tuesday showed U.S. job openings rose to 8.14 million in May.

Focus now shifts to Friday's non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.

Gold is down 5% from a record high of $2,449.89 per ounce it touched on May 20, a rally caused by safe-haven demand driven by geopolitical and economic uncertainty as well as persistent central bank buying, a crucial category of demand.

"Physical demand is still subdued in major markets like India and Turkey but there are signs of recovery there as consumers are keen to protect against other factors like local inflation which still remains high," one trader said.

Elsewhere, spot silver eased 0.2% to $29.39 per ounce.

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