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A Fed policymaker said on Tuesday he will push for an interest rate hike in June or July, and two others predict upto three rate increases this year.

"The prices have slipped slightly today... that is partly due to speculation or increased bets that the Fed will be listing higher rates this year," said Vyanne Lai, analyst, National Australia Bank.

Traders will be eyeing the Fed's April meeting minutes which is due later in the day for further cues on U.S. interest rate outlook.

"I think a lot of investors are holding back as they are waiting for the FOMC minutes," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.

"Officials have been saying they wish to raise the rates but unless and until Fed Chair Janet Yellen mentions something I don't think the market will actually take that into consideration," he added.

Gold has soared in the opening months of 2016 as investors second-guess a wary Federal Reserve. A thicket of risks from the U.K.’s Brexit vote next month to the U.S. presidential election may lift prices even further by year-end, according to Denmark’s Saxo Bank A/S.

“It’s not just one risk right now,” said Head of Commodity Strategy Ole Hansen, who predicts bullion may jump to as much as $1,400 an ounce this year. “We have got several risks, so when you start adding them up, it could be that additional risks will sway some investors to add exposure to gold or maybe revisit gold,” Hansen said in a phone interview on Tuesday.

Right now, the polls are mixed. While an ORB/Telegraph poll this week showed 55 percent of respondents were in favor of remaining in the E.U. -- which helped to boost sterling -- another reading from TNS showed a contrary result, with 41 percent favoring an exit over 38 percent to stay.

In the U.S., political maverick Donald Trump has emerged as the presumptive Republican presidential nominee, and he will likely face off against Hillary Clinton. “We have another political uncertainty later in the year with the presidential election,” said Hansen “So these are all just adding to the reasons why precious metals have become the must-haves.”

Reference: Reuters, Bloomberg