Gold turned lower on Thursday, as sterling bounced higher and U.S. stock markets came well off their lows following the suspension of Britain's campaign for next week's referendum after a member of Parliament was shot dead.

The turnaround in bullion prices, their first drop in seven sessions, came after rallying to the highest in nearly two years, buoyed by the U.S. Federal Reserve, which sounded a dovish note after its latest policy meeting on Wednesday.