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Gold prices dipped on Wednesday as safe-haven buying failed to kick in after the United States withdrew from the Iranian nuclear accord, and as rising US Treasury yields added pressure.

Dismayed European allies sought to salvage the international nuclear pact with Iran after US President Donald Trump pulled Washington out of the landmark accord, reached in 2015 before he took office.

‘The fact that the cat is out of the bag and we have the announcement (on Iran) – that has removed some of the geopolitical support for gold,’ said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Gold prices often rise during times of political turmoil, as bullion is widely considered a safe-haven asset alongside the US dollar and the Japanese yen.

Also weighing on gold, geopolitical tensions in the Korean peninsula eased further as North Korea freed three American detainees ahead of talks between Trump and North Korea leader Kim Jong Un.

Spot gold lost 0.1 per cent at $US1,312.89 an ounce after touching a one-week low of $US1,304.11.

US gold futures for June delivery settled down 70 cents, or 0.05 per cent, at $US1,313 per ounce.

The US dollar index rose to a 2018 peak, then went into negative territory after US producer prices rose less than expected.

Yields on the benchmark 10-year Treasury note breached three per cent. A series of US bond auctions this week could boost yields further, which could pressure gold enough to challenge the $US1,300 support area, Hansen added.

The prospect of more US interest rate increases will also weigh on gold, Standard Chartered analyst Suki Cooper said.

‘We continue to expect prices to test the downside in the lead-up to the June FOMC meeting as the market re-prices the Fed hiking trajectory,’ she said in a note.

Spot gold may revisit its May 1 low of $US1,301.51 per ounce as it failed three times to break resistance at $US1,317, said Reuters technical analyst Wang Tao.

However, a four-year high in oil prices may stoke inflation. ‘If we start to see any sign that inflation will spike, that’ll drive gold higher,’ said Chris Gaffney, president of world markets at EverBank.

Silver rose 0.6 per cent at $US16.53 an ounce. During the session it reached $US16.62, a two-week high.