Gold prices bounced off their lowest level in around eight weeks on Wednesday, as the dollar lost some momentum after striking a one-and-a-half-month high, luring some investors back to the precious metal.

Comex gold futures tacked on $5.90, or around 0.5%, to $1,280.47 a troy ounce by 2:40AM ET (0640GMT), after reaching their worst level since Aug. 9 at $1,271.00 in the last session.

Gold prices ended lower on Tuesday to notch their third-losing session in a row as growing optimism over the health of the U.S. economy and increasing expectations of a Federal Reserve rate hike in December boosted the dollar and Treasury yields.

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.

A stronger dollar can weigh on commodities priced in the currency as it makes them more expensive in other currencies.

Fresh comments from Fed Chair Janet Yellen will top the agenda for global financial markets on Wednesday, as they look for further hints on the timing of the next rate hike.

Yellen is due to deliver a speech at a community banking conference hosted by the Federal Reserve Bank of St. Louis at 3:15PM ET (1915GMT).

Her comments will be monitored closely for any new insight on policy. Last week, Yellen said that the central bank plans to continue gradual rate hikes despite broad uncertainty about the path of inflation.

Investors viewed her remarks as hawkish, which suggested that the Fed would raise rates in December, with further increases to follow in 2018.

The U.S. central bank has already raised rates twice this year.

Besides Yellen, market participants will also keep an eye out on a few U.S. economic reports to gauge how it will impact the Fed's view on monetary policy in the coming months.

Wednesday's calendar features the ADP private sector nonfarm payrolls report at 8:15AM ET (1215GMT), which is often seen as a warmup act for the big Friday government jobs report, as well as the ISM non-manufacturing survey due at 10AM ET (14:00GMT).

Interest rate futures are pricing in more than a 75% chance of a December Fed rate hike according to Investing.com's Fed Rate Monitor Tool.