US gold futures were down 0.3 percent at $1,310.70.
"Despite concerns of slowing global economic growth, it seems the dollar is providing some headwinds for gold at this stage," said Ross Norman, chief executive at Sharps Pixley.
"Effectively, this type of correction is not a bad thing, but broadly speaking the bull run is very much in place."
Economic concerns were brought into sharper focus as India cut interest rates unexpectedly and data showed Germany's economy slowed in December, strengthening fears of a broader slump in Europe.
Gold rose to its highest since late April last week after the US Federal Reserve kept interest rates steady, but it has since lost ground as the dollar has firmed.
"Uncertainty over US-China trade relations and the potential for another US government shutdown continue to underpin interest toward $1,300 and should see supportive price action remain over the near term," MKS PAMP Group said in a note.
In his State of the Union address US President Donald Trump repeated his promise to build a border wall with Mexico, raising the prospect of another US government shutdown.
Reflecting investor sentiment in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell for a fourth straight session on Wednesday.
Among other precious metals, palladium gained 0.3 percent to $1,376.32 an ounce, silver rose 0.2 percent to $15.69 and platinum was down about 0.4 percent at $799.54 after touching its lowest since Jan. 25.