SINGAPROE: Gold prices extended losses on Wednesday as equities jumped to three-month highs on optimism over global economic recovery, though losses were limited by a weaker US dollar and civil unrest in the Unied States.
Spot gold fell 0.5% to $1,718.26 an ounce by 0920 GMT after dropping about 0.7% on Tuesday. US gold futures fell 0.7% to $1,722.70.
"Generally markets are getting comfortable with the fact that even though the data is bad, things are likely to improve and that is taking the shine off gold," said Michael Hewson, Chief Market Analyst at CMC Markets UK.
"Nevertheless, the weak economic backdrop continues to provide some support, with investors continuing to pile into gold-backed ETFs," ANZ analysts wrote in a note.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.1% to 1,129.28 tonnes on Tuesday, their highest since April 2013.
Gold, widely viewed as a safe-haven investment, tends to gain during times of political and economic uncertainty.
Despite the fall in bullion prices, gold is expected to remain supported on the back of the weaker dollar, protests on the streets of the United States, souring US-China relations and inflation worries because of widespread stimulus, Hewson added.
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