The precious metal is on track for its biggest weekly fall since late May, with a drop of 2.4 per cent. Its weakness has dragged down other precious metals, with platinum hitting a 2014 low of $1,350.40 an ounce in earlier trade.

Spot gold hit a low of $1,231.95 an ounce, its weakest since January 23, and was down 0.2 per cent at $1,238.45 at 1133 GMT. US December gold futures were down 10 cents an ounce at $1,238.90, off a low of $1,232.80.

Gold is suffering from growing expectations that the Fed will raise interest rates in 2015, which would boost the dollar, in which the metal is priced, while raising the opportunity cost of holding non-yielding bullion. The dollar index, which measures the US unit’s performance against a basket of major currencies, has risen for nine straight weeks as the Fed’s quantitative easing (QE) programme, which has seen the central bank pump some $4 trillion into the economy, draws to its expected close in October.

Bearish momentum indicators for gold have accelerated, and a sustained break below $1,232 could take gold near $1,180, technical analysts at ScotiaMocatta said.

Expectations that QE was set to end helped trigger a 28 per cent drop in gold prices last year. Investment interest has struggled to recover from the rout.