Gold edged lower on Tuesday after U.S. equities hit all-time highs on market expectations for higher growth and more spending from a Donald Trump presidency.
Trump's victory in the Nov. 8 U.S. election initially saw a flight to safe-haven assets such as gold but the trend reversed as the dollar and bond yields surged on expectations of higher U.S. spending and interest rates.
Spot gold was down 0.24 percent at $1,210.72 an ounce by 3:00 p.m. EDT. In the previous session, the metal rose 0.4 percent, reversing three sessions of losses.
U.S. gold futures for December settled at $1,211.90.
"We see this as a short-covering rally rather than a fundamental change," said ING's head of commodities strategy Hamza Khan, adding that a rise in equities and the dollar were signs of sustained pressure on gold in the medium term.
Recent gold lows had spurred physical buying by bargain hunters, Khan said, but this could establish a floor for bullion rather than push it higher.
"Right now we are just not sure where that floor is," he said.
Gold has fallen more than $100 an ounce from its post-election peak on Nov. 9 as U.S. Treasury yields posted their biggest two-week rise in more than five years and the dollar shot higher.
But the dollar weakened on Tuesday, supporting bullion.
The dollar index, which measures the greenback against a basket of main currencies, fell from a 13-1/2-year high, down 0.1 percent after snapping a 10-day rising streak on Monday.
The expected rise in U.S. interest rates in December is also preventing gold from gaining further, traders said.
"Gold kept its head above water, with technical-based buying supporting the market. However, with the market increasing bets on a December rate hike in the U.S., this buying is unlikely to persist in the short term," ANZ analysts said in a note.
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell 0.71 percent to 908.77 tonnes on Monday. Holdings have fallen 3.6 percent so far this month.
Goldman Sachs on Monday lowered its three- and six-month gold price outlooks to $1,200 per troy ounce and said downside risks remain from potential physical ETF liquidation.
Spot gold may test a resistance at $1,222 per ounce, a break above which could lead to a gain to $1,235, according to Reuters technicals analyst Wang Tao.
Among other precious metals, was rose 1.1 percent at $16.77 an ounce.
was 1.2 percent higher at $945.35 and was up 0.3 percent at $730.40.