SINGAPORE: Gold extended losses to a third session on Monday, falling over 1 percent in early Asian hours as US President Barack Obama chose to seek Congressional approval before initiating any military action against Syria.
Spot gold had dropped to a one-week low of $1,379.44 before paring some losses to trade down 0.5 percent at $1,388.24 an ounce by 0240 GMT. US gold also fell about 1 percent, while silver eased half a percent.
Gold had risen last week to its highest since mid-May as possible military action against Syria prompted safe-haven buying, but gave up some gains after British lawmakers voted against any involvement.
"The easing tensions in Syria have caused gold prices to dip," said Barnabas Gan, an analyst at OCBC Bank in Singapore.
"Our base case scenario is that the Syrian issue will not blow up. We are still bearish on gold," said Gan, who expects prices for the metal to fall to $1,250 by year end.
Obama stepped back from the brink over the weekend and delayed an imminent military strike against Syria to seek approval from the US Congress in a gamble that will test his ability to project American strength abroad and deploy his own power at home.
Before Obama put on the brakes, the path had been cleared for a US assault. Navy ships were in place and awaiting orders to launch missiles, and UN inspectors had left Syria after gathering evidence of a chemical weapons attack that US officials say killed 1,429 people.
Gold has gained about $200 an ounce from its June low of $1,180.71 largely on short covering and technical buying, although it is still down about 17 percent for the year.
But with the drop below $1,400 on Friday, analysts expect further dips. Spot gold may pause around support at $1,376 per ounce, according to Reuters technicals analyst Wang Tao.
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