Gold fell on Thursday, shrugging off weaker European equity markets as a rebound in oil prices from 12-year lows and strong performance on Wall Street pointed to a recovery in risk appetite, blunting bullion's appeal as a haven.
Spot gold was down 1.57 percent at $1,075.86 an ounce.
Gold futures for February delivery settled lower at $1073.60, down $13.50. They were last trading down $11.20 at $1,075.90.
The metal hit two-month highs at $1,112 last week as volatility in Chinese stocks battered appetite for risk, but trading has since been choppy. Stocks fell further in Europe on Thursday, but Wall Street opened higher, maintaining strong performance in the afternoon.
"Overall we are seeing a reversal of some of the renewed anxiety that crept into the market yesterday," said Saxo Bank's head of commodity strategy, Ole Hansen.
"(This is) also showing that gold is becoming a bit immune to continued stock market losses and it indicates that the short positions have now been scaled back to a manageable level, all of which reduces the upside potential at this stage."
Benchmark Brent crude futures recovered to rise 0.7 percent on Thursday after sliding to their lowest since February 2004 as the prospect of increased output from Iran added to gloom over the continuing oil glut and concerns about global economic growth.
Falling oil prices have helped to depress longer-term inflation expectations, strength in which can lift gold prices.
A retreat in the euro from earlier highs after dovish minutes from the European Central Bank's December meeting added to pressure on gold, while some investors looked to be cashing in some of the previous session's gains, dealers said.
"Gold should be much, much higher, but there seems to be some kind of selling, which is hanging in there around $1,093-85," Afshin Nabavi, head of trading at MKS, said.
"A little bit of it may be producer selling because they don't want to be caught lower ... (and) it could very well be profit-taking."
The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported a 2.4 tonne rise in its holdings on Wednesday, bringing its total inflow for the year to 11.7 tonnes.
Among other precious metals, was down 2.37 percent to $13.82 an ounce, erasing the bulk of the previous day's gains. Palladium was up 0.63 percent at $489.70 an ounce, while was down 1.90 percent at $835.