Gold fell to a two-month low on the outlook for higher U.S. interest rates that strengthened the dollar. Many U.S. policy makers raised the possibility they may boost rates sooner than anticipated, minutes of the Federal Reserve's July meeting showed yesterday. Futures traders are seeing more chance of rising interest rates by the middle of next year, reducing gold's allure because the metal only offers investors returns through price gains.

Gold for December delivery fell to $1,277.10 an ounce (-1.23%) on the Comex in New York.