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Gold prices extended losses on Wednesday as the U.S. dollar strengthened after hawkish comments from a Federal Reserve official dampened expectations for a March interest rate cut, while traders awaited comments from more Fed speakers this week.

Spot gold was down 0.2% at $2,023.49 per ounce, as of 0415 GMT, after stooping 1.3% in the previous session - its biggest single-day decline since Dec. 4, 2023.

U.S. gold futures also fell 0.2% to $2,026.90.

Flow of funds to the U.S. dollar have been a key driver impacting the gold price, said Michael Langford, chief investment officer at Scorpion Minerals Ltd, forecasting bullion to trade around $2,000/Oz in the near term.

The dollar index rose 0.1%, making bullion more expensive for other currency holders. It shot up to a more than one-month high on Tuesday after Fed Governor Christopher Waller said that the U.S. central bank should not rush to lower interest rates until lower inflation can clearly be sustained.

Waller's comments triggered a broad sell-off, pulling all three major U.S. stock indexes lower, while the benchmark U.S. Treasury yields logged their biggest daily move upwards in more than three months on Tuesday.

With geopolitical tensions escalating, safe-haven flows could provide a floor for the gold price. However, "the short-term fate of the gold price is likely in the hands of the bond market," Tim Waterer, chief market analyst at KCM Trade, wrote in a note.

Traders are pricing in an about 65% chance of a rate cut by the U.S. central bank in March, down from about 75% probability seen on Tuesday morning, according to the CME FedWatch tool.

Spot silver fell 0.4% to $22.81 per ounce.

Platinum declined 0.3% to $892.37 and palladium slipped 0.2% to $934.44. As the sister metals approach price parity, the rate at which platinum is displacing palladium in the manufacture of autocatalysts is slowing, a trend which is likely to persist through this year.