Gold price drops on speculation on that the Fed will start raising its interest rates this year, while a decline in prices of other commodities also weighed on gold price.

A stronger U.S. dollar also weighed on gold price. The greenback was supported by comments by St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart. Both officials said that the Fed could start raising its interest rates this year.

Market participants are awaiting the release of the Chinese preliminary manufacturing purchasing managers' index (PMI) tomorrow. The index is expected to rise to 47.5 in September from 47.3 in August.

Meanwhile, the Asian Development Bank (ADB) lowered growth forecasts for China. According to the ADB, China is expected to expand by 6.8% in 2015, down from July estimate of a 7.0% rise, and 6.7% in 2016, down from July estimate of a 6.8% increase.

October futures for gold on the COMEX today declined to 1123.00 dollars per ounce.