"The easing of tensions in the euro zone, with optimism around a Greek deal and Draghi's comments, has lifted the stock markets today, dampening interest for safer assets like gold," ActivTrades chief analyst Carlo Alberto de Casa said.
"But a more decisive move for gold could come from the U.S. data front on Friday."
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The metal was depressed by stronger European and U.S. shares, which benefited from strong U.S. employment data and the European Central Bank head's pledge to stick with the bank's loose monetary policy measures.
Wednesday's U.S. jobs data is a precursor to the U.S. Labor Department's non-farm payrolls report on Friday, which will be monitored to gauge the strength of the economy and how it would affect the Federal Reserve's interest rate policy. Higher rates would reduce demand for non-interest-paying bullion.
Investors watched Greece's debt situation after the country's creditors on Tuesday drafted the broad lines of an agreement to put to the government, in a bid to conclude four months of acrimonious negotiations and release aid before the cash-strapped country runs out of money.
Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe's supposedly irreversible single currency.
Bullion had got some support in recent sessions from the uncertainties over the Greek debt crisis as investors sought safety in the metal.
However, general sentiment towards the metal remained bearish, as shown by outflows from gold exchange-traded funds (ETF), a sign investors are not confident of any price gains.
Holdings in the top eight gold ETFs, funds backed by physical metal, were at a five-year low as of Tuesday.