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The prospect of an early rate hike, as indicated by Fed meeting minutes released last week, and a strengthening dollar have pushed down bullion by 3.6 percent so far in May, on track for its biggest monthly decline since November.

Gold held four days of losses as more Federal Reserve officials weighed in with comments that supported the case for higher borrowing costs, strengthening the outlook for the dollar and denting the metal’s allure.

Gold’s retreat this month has eroded its gains in 2016 as traders start to price in higher chances of a U.S. rate increase sooner rather than later after comments from a slew of policy makers and the minutes of the Fed’s April meeting. Fed Chair Janet Yellen speaks at Harvard University on Friday after Philadelphia Fed President Patrick Harker said on Monday that he could see two to three rate hikes in 2016, while his San Francisco counterpart John Williams said two to three increases this year are still “about right.”

The odds of a move next month have more than doubled to 32 percent since the start of May, according to futures bets tracked by Bloomberg.

“Increasing chances of a rate hike in June are likely to continue to weigh on gold,” Australia & New Zealand Banking Group Ltd. said in a report, citing what it described as a procession of Fed speakers who’d made the case for a normalization in interest rate policy.

Don’t think gold is so far removed from that sub-$1,000 level that it can’t revisit that nadir in short order, warned analysts at Citigroup in a note on Monday. And they said it’s all about the dollar.

“We see no reason why gold should not once more trade at $1,050/oz if US$-DXY rises back to the 100-level (now 95.3). Nor do we see anything to prevent gold falling below $1,000/oz if US$-DXY rises above the 100-level,” said the analysts.

"Over the next two weeks ... if the economy is on the firm side in the U.S. and the Fed is ready to move, maybe July at the earliest, then I would say gold is ready to see a correction," said analyst Dominic Schneider of UBS Wealth Management in Hong Kong. "I definitely think gold can fall back below $1,200 in the coming one or two months."

The Fed's policymakers are scheduled to speak this week and are expected to back the case for a rate hike within months.

"If there was to be a hint coming, it could come on Friday when Janet Yell appears, talks and perhaps may decide to further 'prep' the markets for a rate hike going into next week," INTO Capstone analyst Edward Meier said in a note.

Fed Chair Janet Yell will be at a panel event hosted by Harvard University on Friday.

Goldman Sachs sees a 35-percent chance of a rate hike at the Fed's June 14-15 policy meeting.

Reference: Bloomberg, MarketWatch, Reuters