Gold prices declined after Federal Reserve Chair Kevin Warsh cautioned that inflation has not slowed down notably, suggesting that the central bank "still has work to do" unless policymakers gain confidence that price pressures are easing. Warsh reiterated the Fed's commitment to bringing inflation back to 2%, describing it as an unwavering objective. His comments bolstered the U.S. dollar, causing gold to slide by as much as 1.2% during the session.

Warsh also affirmed that "short-term interest rates are the primary tool for achieving the dual mandate." He added, "Unconventional policies aimed at stimulating economic activity may be appropriate in a genuine crisis, but beyond that, even if deployed, they should be used with great caution." For related reading: Warsh says inflation hasn't slowed, vows to hit the 2% target.

The market interpreted Warsh's rhetoric as hawkish, which sustained expectations for interest rate hikes. Higher borrowing costs typically weigh on gold, an asset that yields no interest. Spot gold fell 1% to $4,555.39 per ounce. Silver declined 0.47% to $68.92 per ounce, while platinum and palladium posted gains. The Bloomberg Dollar Spot Index, which measures the greenback's performance, moved higher.