Spot gold was down 0.9 percent at US$1,599.09 an ounce by 20:53 GMT, after briefly falling toward US$1,590
Gold fell in choppy trade on Wednesday after the Federal Reserve issued a policy statement that dashed investor hopes for new monetary stimulus, even though it acknowledged that the US economy has lost momentum.
Silver and platinum group metals, used heavily in industry, also fell after earlier reports showed that a Chinese factory purchasing managers' index (PMI) fell to an eight-month low and the US ISM survey of the American manufacturing sector shrank in July.
At the end of a two-day policy meeting, the US central bank disappointed investors who had hoped for a third round of government bond purchases, also called quantitative easing or QE3.
"You can say that immediate QE is off the table. I will probably not be surprised to see them not do anything in September," said Frank McGhee, head precious metals trader of Integrated Brokerage Services LLC.
McGhee said frustrated gold investors took profits as the Fed's latest outlook crushed any hopes of an imminent stimulus.
Some had anticipated the Fed might act at its September policy meeting following the central bank's high-profile gathering in Jackson Hole, Wyoming in late August.
Spot gold was down 0.9 percent at US$1,599.09 an ounce by 4:53 pm EDT (20:53 GMT), after briefly falling toward US$1,590 immediately after the Fed Open Market Committee (FOMC) statement.
Bullion logged its third straight daily loss as investors unwound a premium built on hopes of further US monetary easing. US gold futures for December delivery settled down US$7.30 an ounce at US$1,607.30, with trading volume about 5 percent below its 30-day average, preliminary Reuters data showed.
Silver fell 1.9 percent to US$27.39 an ounce. It was up more than 4 percent in a four-day rally last week.
Wall Street's losses and weaker industrial metals combined with a stronger dollar also dragged gold lower. Many had expected the Fed to extend its guidance for low rates further into the future, but it maintained its late-2014 language.
Gold investment demand, however, is showing signs of resiliency.
Holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, rose 3.32 tonnes on Tuesday, data from the fund showed. That pared back its monthly net outflow to just over 27 tonnes, which was still the biggest one-month drop in its holdings this year.
Platinum group metals were under pressure after major automakers reported US auto sales for July that were somewhat softer than expected as high US unemployment and weak consumer confidence kept would-be buyers on the sidelines.
Platinum dropped 1.2 percent to US$1,393.75 an ounce and palladium was down 1 percent at US$580.25 an ounce.
CME Group Inc said trading in its US NYMEX platinum futures was briefly halted Wednesday morning due to excessive price fluctuations. The largest US futures exchange also said that no erroneous trades were reported in its precious metals futures complex.