Gold dropped for a second straight session on Wednesday as global equities and the dollar rose following strong US manufacturing data that rekindled speculation the Federal Reserve could hike interest rates this year. Other safe-haven assets also fell, with the Japanese yen nursing broad losses, having suffered a big reversal overnight as traders in London and New York took a brighter view on the global economy.
Asian equities rallied to two-month highs. Spot gold slipped 0.5 percent to $1,225.66 an ounce by 0721 GMT.
Selling in gold will likely continue if there's another round of strong buying in global equity markets, said INTL FCStone analyst Edward Meir.
"All this goes to show us that gold still remains very much in the orbit of US equities and we suspect that this will remain the case for some time to come," he said.
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