Gold prices fell to a 1-1/2-week low on Wednesday as renewed hopes that US President Donald Trump will unleash growth-friendly spending policies boosted shares and eroded bullion's safe haven attraction.
Spot gold was down 1 percent at $1,196.79 an ounce by 2:08 EST (1908 GMT) after touching $1,192.74, the weakest since January 13, while US gold futures settled down $13, or 1.07 percent, at $1,197.8 per ounce.
Investors turned their attention to world stocks, which hit a 19-month high, lifted by strong Japanese trade data, stellar European company earnings and hopes that Trump will press ahead with a large fiscal spending package.
The Dow Jones Industrial Average traded above 20,000 for the first time.
"The combination of higher bond yields and higher stocks are outweighing the marginally weaker US dollar and in turn is causing the loss in gold today," said Carsten Menke, research analyst at Julius Baer in Switzerland.
Menke, who expects the dollar to rebound and pressure gold in coming weeks, has pegged a three-month price target of $1,075.
Palladium slumped as much as 7.2 percent to $727.50 an ounce, and pared losses slightly to be down 7 percent at $731, its biggest one-day fall since April 2013. This slump was off the prior session's 1-1/2-year high.
Silver dropped 0.7 percent to $16.95, while platinum declined 1.6 percent to $979.60.
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