Gold on Tuesday fell to a new three-week low, bringing losses this week to more than one
percent, as demand for riskier assets drove stocks and U.S. treasury yields higher and the dollar hit a six-week peak against the yen.
"Risk appetite is back," said Societe Generale analyst Robin Bhar.
Rising share prices and higher bond yields increase the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies.
Gold on Monday fell 0.9 percent after U.S. lawmakers agreed on a spending package to avert a U.S. government shutdown and the Nasdaq share index reached a record high.
The market's so-called fear gauge, the VIX volatility index, has meanwhile fallen to its lowest since 2007.