With the Dollar Index climbing 1.5 percent, the bullion - which characteristically moves inversely to the US currency - tumbled 4.7 percent this month; with Tuesday's price- index marking the lowest for the precious metal in the past six weeks.

As the dollar strengthened - against Euro and other currencies except yen - and equities rebounded, gold for immediate delivery traded at $933.90 an ounce at 10:05 a. m. in Singapore. Falling to its lowest level since May 12, spot gold plunged 1 percent to $912.90 an ounce, compared to New York's speculative close of $921.90.

There has been a 0.5 percent fall in US gold futures for August delivery to $916.30 per ounce. On the COMEX division of the New York Mercantile Exchange, August futures on Monday settled at $921 an ounce on Monday.

Commenting on the reduce demand for gold as an alternative investment, Ronald Leung, a director of Lee Cheong Gold Dealers in Hong Kong, said: "Right now, market players are closely watching the dollar given its strong influence to the gold market. There is no other reason to buy gold so the dollar's strength is used as an excuse to sell gold."

Leung also said that the market was exercising caution, waiting for the Fed opinion about the economy or slow growth, or about its existing policy standpoint.