Gold prices fell on Monday as the dollar and stocks rallied, after federal investigators cleared Democrat Hillary Clinton of criminal charges related to her use of a private email server, just two days before the U.S. presidential election.
The Federal Bureau of Investigation (FBI) said on Sunday it stood by its earlier finding that no criminal charges were warranted against presidential candidate Clinton for using a private email server for government work.
Uncertainty over the outcome of the U.S. election after the FBI probe had boosted the safe-haven appeal of gold, sending prices 2 percent higher last week.
"I think the news has just taken a bit of the heat out of that safe-haven buying for gold that emerged last week after Republican candidate Donald Trump gained in a lot of polls in the U.S.," ANZ analyst Daniel Hynes said.
Gold prices are going to hover around $1,290-$1,300 for the next couple of days, analysts said.
"If Clinton wins there's going to be a further correction in prices and gold may even go down to $1,250. We say this because we see a strong correlation between gold prices and Trump's popularity in the polls," said Joshua Rotbart, managing partner at Hong Kong-based bullion services provider J. Rotbart & Co.
The reopening of the probe by the FBI narrowed Clinton's lead over Trump, polls showed last week, rattling financial markets that had been pricing in a Clinton victory and driving up gold prices to a one-month high on Thursday.
Asian stocks bounced while the dollar rose against the yen.
Spot gold has established a bearish target at $1,273 per ounce, following its failure to break a resistance at $1,308, according to Reuters technical analyst Wang Tao.
Meanwhile, bullion - highly sensitive to rising rates - also came under pressure due to increasing odds of an interest rate hike in December by the U.S. Federal Reserve.
Strong U.S. jobs data in October showed continued progress towards the Fed's goals, two policymakers have said, with both supporting an interest rate hike at the central bank's meeting in December.
"The rate rise in December is largely already priced in. I wouldn't be surprised to see a knee-jerk move following a rate rise announcement but we think it will be brief," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.