Gold fell on Thursday and was bound for its worst quarter in five as a stronger dollar and hawkish rhetoric from central banks eroded the appeal of the non-yielding asset.

Spot gold fell 0.5% to $1,808.60 per ounce by 1105 GMT, on track to fall more than 6% for the quarter and drop for a third straight month. U.S. gold futures slipped 0.4% to $1,810.60. "Gold is suffering because of the aggressive stance of central banks, especially the Federal Reserve, telegraphing their strong desire to control inflation regardless of the pain that may generate in the economy at large," said Ricardo Evangelista, a senior analyst with ActivTrades.

Bringing down high inflation around the world will be painful and could even crash growth, but it must be done quickly to prevent rapid price growth from becoming entrenched, the world's top central bank chiefs said at the ECB's annual conference in Portugal. Normally, gold tends to do well in times of high inflation, but investors will be worried about parking their capital in the zero-yield asset, Evangelista added.

The dollar index hovered near its recent two-decade peak, and was headed for its best quarter in over seven years, making greenback-priced gold more expensive for overseas buyers. Bullion's performance in the second quarter erased gains made earlier in the year, even as the Ukraine-Russia conflict lifted the safe-haven asset's demand, with prices near the levels at the start of 2022 at just above $1,800.

"Something must change fundamentally to trigger a potential rally, and as things stand, $1,800 and potentially lower is on the radar until the time when the Fed's future rate hikes are fully priced in – possible late this summer," Fawad Razaqzada, market analyst at City Index said.

Spot silver fell 1.4% to $20.41 per ounce, platinum slipped 1.7% at $901.70, and palladium eased 0.4% to $1,955.20. (Reporting by Arundhati Sarkar and Bharat Govind Gautam in Bengaluru; Editing by Amy Caren Daniel and Vinay Dwivedi)