Spot gold hit its lowest since Sept. 28 at $1,869.21 per ounce before recovering to $1,881.41 by 12:01 p.m. EDT (1601 GMT). U.S. gold futures fell 1.5% to $1,882.70.
Silver slumped as far as $23, its lowest since Oct. 7.
"The metals were so dependent on more stimulus at this point and the bear camp is fully in control right here," said Bob Haberkorn, senior market strategist at RJO Futures.
"Overall, the gold market is lower on a strengthening dollar due to the lack of stimulus measures and risk-off mentality heading into this election."
The dollar jumped 0.6% to a more than one-week high against a basket of other major currencies, with the prospect of fresh European lockdowns weighing heavily on the euro and accelerating a tumble in equities.
Despite recent volatility, gold, considered a hedge against inflation and currency debasement amid unprecedented global stimulus, is still up about 25% so far this year.
Analysts said that although precious metals prices had dipped, the move was not yet being precipitated by a rush to cover losses elsewhere and meet margin calls, as happened in March.
U.S. President Donald Trump said on Tuesday that an economic relief deal would likely come after the Nov. 3 election.
He also questioned the integrity of the U.S. Presidential election, saying it would be "inappropriate" to take extra time to count the millions of ballots cast by mail.
David Meger, director of metals trading at High Ridge Futures said the global pick-up in coronavirus cases was also just as important.
"All of those are responsible for the pick up in volatility and the downside in metals prices."
Platinum fell 0.6% to $873.33 and palladium, shed 3.8% to $2,242.56.
(Reporting by Brijesh Patel and Arpan Varghese in Bengaluru; Editing by Kirsten Donovan and Pravin Char)
By Brijesh Patel