Gold prices slipped overnight to their lowest in more than five weeks as the US dollar rose on stronger than expected economic data and rising US Treasury yields.
Spot gold was down 0.1 per cent at $US1,285.57 per ounce.
US gold futures settled down 0.2 per cent to $US1,284.7 per ounce.
‘With the US-China trade agreement looking like it will happen and the softening of Brexit negotiations seeming to be developing into a positive thing, people are getting out of metals and converting it to equities,’ said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
‘If there is a (trade) agreement, there is a lot more room on the upside for equities and then the bull run in gold is over.’
On Friday, gold dropped below $US1,300 an ounce, hurt by a robust US dollar.
Gold has shed more than 2 per cent this month as trade talks between China and the US accelerated, with reports saying a deal could be sealed at a summit around March 27.
Global stock markets were at five-month highs following China’s assurance of stimulus measures after lowering its growth targets.
‘As long as world stock markets remain in near-term price uptrends, it will be difficult for gold and silver markets to sustain rallies,’ said Jim Wyckoff, senior analyst at Kitco Metals in a note.
The US dollar stood close to a two-week peak against peers, supported by strong data on new home sales and services industries, which eased worries about a deceleration in U.S. economic growth.
‘(US new home sales) data continues to show robust growth … which should strengthen the (US) dollar index and cause investors to start going for other asset classes that provide greater return,’ said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
Gold prices dropped to $US1,280.70 soon after the data, its lowest level since January 25.
Meanwhile, investment bank Goldman Sachs raised its 12 month gold price forecast to $US1,450 per troy ounce from $US1,425.
Markets will now look ahead to the European Central Bank’s monetary policy meeting on Thursday and US non-farm payrolls data on Friday.
Silver was up 0.3 per cent at $15.12 per ounce. Earlier in the session it fell as low as $US15.01, its lowest since December 27.
Spot palladium declined 1.3 per cent to $US1,513.88 per ounce, while platinum was up 0.2 per cent at $US836.35.