Gold prices fell in Asia on Wednesday as investors took positions ahead of an expected roll-out of the Trump administration's plan for tax cuts and after noting what some are seeing as a more hawkish Fed after a speech by the central bank's chief.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell 0.27% to $1,298.20 a troy ounce.

Overnight, gold prices fell on Tuesday as December rate-hike expectations jumped after Federal Reserve chair Janet Yellen said that central bank should be “wary of moving too gradually” on interest rates to avoid the economy overheating.

In a speech titled “Inflation, Uncertainty, and Monetary Policy” at the National Association for Business Economics’ annual meeting on Tuesday, Fed chair Janet Yellen reaffirmed the central bank’s view that raising rates gradually was the most appropriate policy amid uncertainty over inflation.

“It would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” Yellen said Tuesday in the text of remarks prepared for delivery in Cleveland.

According to investing.com's fed rate monitor tool, nearly 80% of traders expect a December rate hike, compared to about 60% a week ago.

Yellen’s comments came a day after gold prices rallied sharply, following escalating tensions on the Korean Peninsula after North Korea said U.S. President Donald Trump had “declared war” and that it would “shoot down U.S. bombers flying near the peninsula."

"Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country," North Korea Foreign Minister Ri Yong said.

Analysts were quick to downplay expectations of a prolonged slump in gold prices suggesting that safe-haven demand could return as geopolitical uncertainty remained “front and center”.

"Geopolitics haven't come off the table. They are still front and center but after a rally you tend to get a tiny bit of a pullback," said ETF Securities commodity strategist Nitesh Shah.