Views are more mixed on whether a further decline is a correction or something more ominous, such as an outright bear market.
She said that a "regular pace of rate hikes ahead is likely still warranted", but concluded that the Fed may need to slow the removal of accommodation.
Over the past month, Hurricanes Harvey and Irma caused substantial damage in Texas and Florida that could have a short-term economic impact in those areas. Meanwhile, silver fell sharply after losing 1.87% of its value, yielding up to 16.86 dollars per troy ounce.
US stock benchmarks are mixed, with the Dow Jones Industrial Average DJIA, -0.01% on track to extend a four-session skid, while gold futures GCZ7, -0.86% perceived as a haven asset saw a firm drop below $1,300 an ounce.
"We believe it [recent price weakness] is a reversal, so more than just a correction", Bhar said.
The US dollar has broken technical resistance and the immediate downtrend.
The U.S. Treasury Department named eight North Korean banks and 26 individuals linked to the nation's financial networks to its sanctions list.
Traders of short-term interest-rate futures see about a 76 percent chance of a December rate hike, but are betting on only one rate hike next year.
The US dollar has built added to September's modest gains with another 1.3% rally this week, breaking the downtrend channel in place since the April highs. These tend to hurt gold.
"We don't think a 25-basis point rate cut would do much to spur economic activity, with interest rates already at such low levels" said ANZ's Goh.
In a speech focused on workforce development, he said the Fed, which is tasked with achieving maximum sustainable employment, "cannot declare success if we have people who want to work but lack the skills to fill available jobs".
Meanwhile, Phil Flynn, senior market analyst with at Price Futures Group, suggested that a correction may be almost over in a longer-term bull market for gold.
Federal Reserve Chair Janet Yellen acknowledged Tuesday that the Fed is puzzled by the persistence of unusually low inflation and that it might have to adjust the timing of its interest rate policies accordingly. Despite that decision, Fed policymakers have become increasingly vocal about their uncertainty on what is holding back inflation.
Gold prices are lower in pre-U.S. -day-session trading Wednesday.
November West Texas Intermediate crude declined by 34 cents, or 0.7%, to settle at $51.88 a barrel on the New York Mercantile Exchange. Geopolitical risks can boost demand for safe haven assets such as gold. The width of this region reflects the average accuracy of inflation projections made by private and government forecasters over the past 20 years.