Gold prices snapped an unprecedented 11-day winning streak on Tuesday, falling more than 1 percent as signs of progress in talks to avert a US default sapped safe-haven buying. Silver also tumbled, over 4 percent, as investors tentatively bought back into riskier assets after US President Barack Obama supported a bipartisan proposal for a new deficit-reduction plan.
The S&P 500 jumped 1.5 percent and crude oil and copper also rose sharply. Spot gold, which hit a new record $1,609.51 an ounce earlier in the day, fell 1.2 percent to $1,584.76 as of 3:35 pm EDT (1935 GMT).
US gold futures for August delivery settled down $1.30 at $1,601.10 an ounce, but fell by more than $12 in after-hours trading following Obama's comments. Volume topped 200,000 lots, one of the busiest days in more than two months.
Silver was down 4.2 percent at $38.81 an ounce.
Spot platinum was down 0.5 percent at $1,761.99 an ounce, while spot palladium was down 0.9 percent at $785.22 an ounce.