Gold fell to $1,092.80 (-0.97%) an ounce suggesting that downward pressure on the metal persisted even after the 4% decline on Monday (the most dramatic drop in almost two years). Holdings in top gold fund SPDR Gold Trust declined to their lowest since 2008 and many analysts forecast bullion prices to fall further.

"We can't see any bullish factor. Inflation is well contained and we don't see a systemic crisis that might push people to buy gold," Wing Fung Financial Group's head of research, Mark To, said.

Gold top consumers India and China did not increase demand despite prices holding near a five-year low.

Meanwhile mine closures are not expected to happen in the near future despite ongoing pressure on prices as operators instead try to reduce costs to keep operations going.