Gold prices dropped on Thursday, reversing gains on a stronger U.S. dollar and concerns about an interest-rate increase in December, says Dow Jones.

Gold for December delivery was recently down 0.6% at $1,265.30 a troy ounce on the Comex division of the New York Mercantile Exchange, after trading as high as $1,280.60 earlier in the session.

The WSJ Dollar Index was recently up 0.7% at 89.53, putting pressure on gold prices. Gold is priced in the U.S. currency and becomes more expensive to foreign buyers when the dollar strengthens.

"Gold's retreat was in lockstep with the financial market and especially the equity market recovery," wrote James Steel, chief precious metals analyst at HSBC, on Wednesday.

"It looks like pricing for the December expected rate hike is on schedule ... so [the] gold rally is capped," George Gero, managing director at RBC Wealth Management, said in a Thursday note.