Gold prices weakened on Wednesday (August 27th) as the dollar strengthened and some investors booked profits from the more than two-week peak reached in the previous session.

Spot gold prices fell 0.3% to $3,382.31 per ounce, as of 08:11 GMT. US gold futures for December delivery fell 0.1% to $3,430.80.

The dollar index rose about 0.4% against a basket of currencies, making dollar-priced bullion more expensive for holders of other currencies.

"(Gold) prices move faster than an arrow, with the direction of movement determined by the dollar. The current weakness in gold prices is likely due to profit taking after gold reached a two-week high, as momentum fades to the upside," said independent analyst Ross Norman.

Gold bullion prices hit their highest level since August 11 on Tuesday after US President Donald Trump's attempt to fire Fed Chair Lisa Cook undermined confidence in the central bank's independence and, more broadly, US assets, boosting demand for safe-haven assets.

Fed Chair Cook will file a lawsuit to prevent Trump from firing her, her lawyer said on Tuesday, setting off what could be a protracted legal battle over the White House's efforts to shape US monetary policy.

"I think market participants will wait for a US court ruling on whether Trump can fire Cook before gold reacts more strongly," added UBS analyst Giovanni Staunovo. Data-wise, the focus is on the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, due on Friday for clues on interest rate cuts following Fed Chairman Jerome Powell's dovish remarks at the Jackson Hole symposium last week.

The market has priced in an 87% chance of a quarter-point rate cut at the Fed's September 17 policy meeting, according to the CME FedWatch Tool. Non-yielding gold typically performs well in low interest rates. Elsewhere, spot silver fell 0.6% to $38.37 an ounce, platinum fell 0.7% to $1,339.52, and palladium fell 0.1% to $1,092.93. (alg)

Source: Reuters