Gold prices updated 11-week low second consecutive session after reports that Ukraine and Russia agreed to a cease-fire in eastern Ukraine.

A day earlier, gold prices fell by 1.7% after positive manufacturing data the United States, released on Tuesday, reinforced the view that the economic recovery is gaining momentum, and raised expectations that the Fed will raise rates earlier than previously thought.

Gold hit session lows after the president of Ukraine Petro Poroshenko said that it has reached an agreement on "permanent ceasefire" in eastern Ukraine with Russian President Vladimir Putin.

However, a spokesman for President Putin later denied the statement of the ceasefire, as Russia is not a party to the conflict, but added that the two leaders "discussed how to end the conflict."

On Thursday, the market participants are expecting the results of the ECB policy meeting on the background of the increased expectations that the central bank will announce quantitative easing to shore up economic growth and stave off deflation.

Earlier today, the index of USD, which tracks the performance of the greenback versus a basket of six other major currencies, hit a 13-month high of 83.07 before the climb up to cut 82.93.

A strong dollar usually puts pressure on gold, as it reduces the metal's appeal as an alternative asset and increases in the price of dollar-denominated commodities for holders of other currencies.

The cost of the October gold futures on the COMEX today dropped to $ 1268.00, and then increased to $ 1279.00 per ounce.