Spot gold rose 0.1% to United States dollars 1,294.62 per ounce at 0108 GMT.
"It would be imprudent to keep monetary policy on hold until inflation is back to two percent", Fed Chair Janet Yellen said Tuesday, while speaking to the National Association for Business Economists (NABE) in Cleveland, Ohio.
The US dollar has built added to September's modest gains with another 1.3% rally this week, breaking the downtrend channel in place since the April highs.
-The Bloomberg Dollar Spot index gained 0.3 percent to the highest since August.
The biggest focus for the market for Wednesday is the announcement of a tax plan by the U.S. administration and Republicans in Congress.
"The idea that Trump could be reaching across the aisle, talking about tax cuts to middle and low income households, if it comes to pass, we are talking a pretty material fiscal boost to the USA economy".
It was also interesting to note that Fed officials worry that keeping rates lower allows little room for stimulus when another economic slowdown hits. "The impact of a successfully implemented (tax overhaul) plan would be far-reaching with President Trump placing a key focus on bringing back funds from USA firms "parked overseas". But she did make clear the Fed still feels a gradual pace of rate hikes remains the base case.
Growing expectations that the U.S. Federal Reserve will raise interest rates for the third time this year lifted the dollar on Wednesday, and European share prices rose as U.S. President Donald Trump's administration prepared to outline a new tax plan.
The Euro-to-Dollar rate pared a 0.68% loss overhanging from the London session to trade just 0.52% down at 1.1794. The large-cap S&P 500 Index closed flat at 2,496.84.
Both policymakers nodded to the three devastating hurricanes that have struck parts of the USA south and the Caribbean, noting their effects will likely make it more hard to interpret economic data in coming months.
USA gold futures for December delivery fell 0.35% to USD1,297.10 per ounce. The index had been expected to dip by 0.5%. It rose by as much as 0.3% earlier. November Brent on Tuesday fell 58 cents, or 1%, to $58.44 a barrel on ICE Futures Europe. The euro was at $1.1756-1757, down from $1.1812-1813, and at ¥132.48-49, up from ¥132.01-02.
The greenback also clawed back gains against the Japanese currency to fetch 112.73 yen.