Gold prices fell to their lowest in almost a week on Wednesday, as the dollar strengthened after U.S. President Donald Trump's decision to pull the United states out of the Iran nuclear deal boosted oil prices and pushed Treasury yields higher.
Raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies, Trump said he would reimpose U.S. economic sanctions on Iran that had been lifted under the 2015 agreement.
The dollar rose against the yen as oil prices climbed to a 3-1/2-year high, pushing yields on the benchmark 10-year Treasury note closer to 3 percent.
Spot gold had fallen $1,305.16 an ounce, before trading 0.1 percent lower at $1,312.61.
U.S. gold futures for June delivery settled down 70 cents at $1,313.
"(Gold is) stuck between rising geopolitical risks and the stronger U.S. dollar. The safe-haven buying certainly hasn't been as strong as we thought it might have been following Trump's announcement," said ANZ analyst Daniel Hynes.