Gold prices settled nearly 2 percent lower on Wednesday as investors took profits from a run-up spurred by geopolitical concerns after Russian President Vladimir Putin urged Ukrainian separatists to postpone a referendum and said he was pulling troops back from their common border.
Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held, potentially pulling Ukraine back from the brink of dismemberment. He also announced he was pulling Russian troops back from the Ukrainian border.
However, the White House said it has seen no evidence that Putin has pulled Russian troops back from the Ukrainian border, and said it wants a referendum on secession to be cancelled, not merely postponed.
for June delivery ended 1.5 percent lower at $1,288.90 an ounce, with trading above its 30-day average, preliminary Reuters data showed.
Spot gold was last down 1.3 percent at $1,299 an ounce, on track for its biggest one-day drop in three weeks.
Chart: Precious Metals
The dollar turned higher after Federal Reserve Chair Janet Yellen said in congressional testimony the U.S. economy was still needed lots of support given the "considerable slack" in the labor market even as she said "a high degree of monetary accommodation remains warranted."
"There are still some questions out there about the Ukraine situation, and whether the Fed will increase interest rates or leave them here, so all of these uncertainties are weighing down on gold," said Thomas Capalbo, precious metals trader at brokerage Newedge.
In the past three days, gold has risen as much as 3.5 percent to a high of $1,314.70 earlier Wednesday as fears that a stand-off between pro-Russian separatists and government troops in Ukraine could bring the country to war.
The metal also came under pressure after Yellen's comments affirmed a view that the Fed will end its asset purchases this fall as expected.
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