Gold ended its lowest level in about 3-1/2 months on Tuesday after strong U.S. data lifted optimism about the economy, while platinum fell after South Africa's mining minister pledged to mediate in a long-running strike.
U.S. consumer confidence rose in line with expectations, with the Conference Board index at 83 in May from a downwardly revised 81.7 in April, as consumers saw the economy, including the labor market, in a better light.
Separately, the Commerce Department said durable goods orders increased 0.8 percent as demand for defense capital goods surged.
Chart: Precious Metals
U.S. gold futures for June delivery settled 2 percent lower at $1,265.50 an ounce, its lowest close since February 7.
Spot gold, meanwhile, fell 2 percent to its lowest since Feb. 10 at $1,265.76 an ounce in earlier trade and was down 1.9 percent at $1,267 an ounce, heading for its worst daily loss in two months.
Equity markets were firmer, eroding gold's appeal as a hedge against riskier assets, while the dollar cut its losses after the data.
Gold has struggled to break consistently above the $1,300-per-ounce level for the past two weeks, indicating a lack of conviction by investors and speculators, analysts said.
Developments in Ukraine, where air strikes and a paratrooper assault were launched against pro-Russian rebels who seized an airport on Monday, had little impact on gold, which is usually bought as an insurance against risk in times of global political uncertainty.
Market players were also eyeing developments in physical markets which have been subdued over the past several weeks.
China's gold imports from main conduit Hong Kong fell to a 14-month low of 67.040 tons in April from 85.128 tons in March, as a weaker yuan and local discounts curbed demand.
China has approached foreign banks and gold producers to participate in a global gold exchange in Shanghai, as the world's top producer and importer of the metal seeks greater influence over pricing.
In No. 2 consumer India, investors are hoping the new government would relax rules imposed on gold imports last year, a move they believe will spur pent-up demand.
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