Gold edged down on Wednesday, as the impact of higher U.S. real yields counteracted the effects of a weaker dollar, soft U.S. data and doubts that the Federal Reserve will raise interest rates at its June meeting.
Spot gold was down 0.2 percent at $1,190 an ounce, while U.S. gold futures for June delivery settled down $2.90 at $1,190.30 an ounce.
Gold, which pays no interest, was under pressure from a two-month high in the benchmark 10-year U.S. Treasury yield.
``U.S. real yields, which correlate the most to the gold price, have risen,'' Macquarie analyst Matthew Turner said. ``That's what's driving gold prices,'' he said, adding that he expected the Fed to raise rates earlier than the market currently anticipates.
The dollar fell 0.9 percent against a basket of currencies, after data showed U.S. private employers added 169,000 jobs last month, the fewest since January 2014 and 40,000 short of expectations.