Gold prices slipped on Tuesday to their lowest in more than five weeks as the dollar rose on stronger-than-expected economic data and rising US Treasury yields, while global equities prices rose on improved risk sentiment.
"With the US-China trade agreement looking like it will happen and the softening of Brexit negotiations seeming to be developing into a positive thing, people are getting out of metals and converting it to equities," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
"If there is a (trade) agreement, there is a lot more room on the upside for equities and then the bull run in gold is over."
Spot gold fell 0.3 percent to $1,282.82 per ounce as of 10:42 a.m. EST (1542 GMT). The session low was $1,280.70, the lowest since Jan. 25.
US gold futures dropped 0.3 percent to $1,283.80 per ounce.
On Friday, gold dropped below $1,300 an ounce, hurt by a robust dollar. Gold has shed over 2 percent this month as trade talks between Beijing and Washington accelerated, with reports saying a deal could be sealed at a summit around March 27.
Global stock markets were firm at five-month highs following China's assurance of stimulus measures after lowering its growth targets.
"As long as world stock markets remain in near-term price uptrends, it will be difficult for gold and silver markets to sustain rallies," said Jim Wyckoff, senior analyst at Kitco Metals in a note.
The U.S. dollar stood close to a two-week peak against key peers at 96.726, supported by strong data on new home sales and services industries, which eased worries about a deceleration in US economic growth.
Investment bank Goldman Sachs raised its 12 month gold price forecast to $1,450 per troy ounce from $1,425.
Markets will now look ahead to the European Central Bank's monetary policy meeting on Thursday and US non-farm payrolls data on Friday.
Among other precious metals, silver was up 0.3 percent at $15.12 per ounce. During the session it slumped as low as $15.01, its lowest since Dec. 27.
Spot palladium declined 1.3 percent to $1,513.71 per ounce while platinum was little changed at $834.78.