Gold settled lower on Wednesday—a sign that its positive start to 2014 may be fading—leaving U.S. growth prospects and expectations for further Federal Reserve stimulus reduction to dominate sentiment.
Spot gold lost 0.2 percent to $1,239 per ounce, after falling nearly 1 percent on Tuesday—its biggest one-day decline this year. U.S. gold futures for February delivery settled $3.20 lower at $1,238.60 per ounce.
Investors have shied away from putting new money into gold as international economic recovery, led by the United States, is boosting stock markets and hurting the metal's appeal.
Dealers and analysts said concerns about further trimming of U.S. central bank stimulus, which weighed on prices last year, were back on the agenda.
The Federal Reserve holds its next policy meeting on Jan. 28-29 when markets think the U.S. central bank will announce a second cut to its $85 billion monthly bond purchases, which had burnished gold's inflation-hedge appeal.