Tensions in Ukraine provided some support for the metal, a traditional haven from risk.
Spot gold briefly trimmed losses to $1,297.40 an ounce after the Commerce Department's report said that U.S. first-quarter gross domestic product expanded at the slowest pace since the fourth quarter of 2013.
But the metal retreated again soon afterwards and was down 0.7 percent at $1,287 an ounce at 1321 GMT after closing flat in the previous session. U.S. gold futures for June delivery were down $8.50 an ounce at $1,287.70.
Economists estimate the severe winter weather could have chopped off as much as 1.4 percentage points from GDP growth, but data since the beginning of the second quarter has been positive.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3.0 percent rate in the first quarter, the Commerce Department said.
But the market's biggest focus will be an announcement by Fed policymakers later on Wednesday. They are likely to say they will continue paring their massive bond-buying stimulus, and may also address issues such as the timing of a rate hike, although no major changes are expected.
"That should have a negative impact on gold, unless we get some surprising developments again on the geopolitical front," Peter Fertig, a consultant at Quantitative Commodity Research, said.
A strong economy could mean that the Fed could quicken its path towards a tighter monetary stance.
Loose monetary policy, coupled with prolonged low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been important factors driving gold higher in recent years.
"The combination of the FOMC and the economic releases occurring on the same day may cause gold volatility to pick-up in the near-term and may put to test the recent tight $30 price range of between $1,280-1,310," HSBC analysts said in a note.
Friday is also important for the markets as the U.S. nonfarm payrolls report will be released.
UKRAINE TENSIONS SIMMER
Meanwhile, hundreds of pro-Moscow separatists stormed government buildings in one of Ukraine's provincial capitals on Tuesday and fired on police holed up in a regional headquarters, a major escalation of their revolt despite new Western sanctions on Russia.
Geopolitical tensions usually increase gold's appeal as a safe-haven asset. Gold has gained from rising Ukraine tensions this year, but this has been offset by strong economic data.
"Overall, the market is extremely quiet at the moment, and the general sentiment seems to be bearish, as it so often is when we are at the low end of the range," David Govett, head of precious metals at Marex Spectron, said in a research note.
"However, apart from the Ukraine factor, it is hard to disagree with this scenario. At this particular moment in time, I can see no real reason for being long of gold and would look to sell rallies towards $1,300."
Deutsche Bank has quit its seat on the London precious metal fix without finding a buyer, leaving four banks to set the global gold price benchmark under increasing regulatory scrutiny.
Fertig said Deutsche Bank's announcement on Tuesday was adding uncertainty to the precious metals market, because fewer participants could mean the benchmark was in jeopardy.
Among other precious metals, silver was down 1.6 percent at $19.15 an ounce, spot platinum was down 0.5 percent at $1,418.24 an ounce, and spot palladium was down 0.3 percent at $799.72 an ounce.