By Zandi Shabalala
LONDON (Reuters) - Gold fell for a third straight session on Wednesday on pressure from a firmer dollar amid speculation that the next chair of the U.S. Federal Reserve could be a policy hawk.
Spot gold was down 0.3 percent at $1,280.86 an ounce at 1400 GMT, having touched its lowest since Oct. 9 at $1,277.14.
U.S. gold futures for December delivery were off 0.3 percent at $1,282.60.
"Interest rate hikes had not been fully priced in for next year. That has changed massively following speculation that (Fed Governor Jerome) Powell might become the next chairman," said Commerzbank analyst Carsten Fritsch.
U.S. President Donald Trump has a pool of five candidates to choose from for the next chair of the Fed and is likely to announce his choice before going to Asia in early November, a source familiar with the situation said.
Jerome Powell is expected to be the next Federal Reserve chairman, according to a slim majority of economists in a Reuters poll, though most of them said that incumbent Janet Yellen would be the best option.
The dollar rose on the speculation and as the market awaited more detail on Trump's tax reform. [USD/]
Hopes of Trump winning backing for his sweeping tax reform picked up steam on Monday when U.S. Senate Republicans gained crucial support for a vote on a budget resolution.
Tax reform is seen as negative for gold as it is expected to stimulate economic growth and inflation.
The U.S. central bank is widely expected to raise interest rates for the third time this year in December.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
"With dollar strength in mind, it would present further risks to gold, but I'm waiting to see how the Catalonia crisis unfolds tomorrow, pinpointing a possible next move for gold, in either direction," said Jameel Ahmad, vice president of market research at FXTM.
Catalonia refused on Tuesday to bow to the Spanish government's demand that it renounce a symbolic declaration of independence, setting it on a political collision course with Madrid this week.
Gold is often used as a store of wealth in times of political or economic uncertainty.
MKS precious metals trader Sam Laughlin said the $1,280 an ounce support remained intact but further weakness could test the 100-day moving average at $1,275.
Support below that level sat between the early October low of $1,260 and the 200-day moving average at $1,257, he said.
In other precious metals, silver was flat at $17 an ounce after touching its lowest in more than a week.
Platinum slipped by 0.6 percent to $924.70 while palladium eased slightly to $978.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by David Goodman and David Evans)