Gold retreated on Monday from a more than seven-year high, as stocks and oil surged on optimism surrounding the trial of a potential COVID-19 vaccine.
Spot gold fell 0.7% to $1,728.72 per ounce, after hitting its highest since October 2012 at $1764.55. U.S. gold futures settled 1.3% lower at $1,734.40.
"The reason why gold is kind of wobbling around positive and negative change for the day right now is because everybody is thinking 'risk-on' get into equities - as markets across the board are up 3%," said Michael Matousek, head trader at U.S. Global Investors. However, the trend "is still to the upside, there's still plenty of reason to buy gold."
Wall Street surged and oil prices hit two-month highs after drugmaker Moderna said its experimental vaccine showed promising results in an early-stage trial, with investors also counting on more stimulus to rescue the U.S. economy from a slump.
U.S. Federal Reserve Chairman Jerome Powell, in broadcast remarks on Sunday, outlined the likely need for three to six more months of government financial help for firms and families.
Gold, which tends to appreciate on expectations of lower interest rates, has risen about 14% this year as central banks rolled out a wave of rate cuts and other stimulus to limit economic damage from the pandemic.
Reflecting investor appetite, holdings in the world's largest gold-backed exchange-traded fund rose to their highest in over seven years.
Data published last week showed U.S. retail sales and industrial production both plunged in April, with the coronavirus crisis continuing to pummel the U.S. labour market.
Japan too slipped into a recession in the first quarter.
Markets also kept a wary eye on souring U.S.-China trade relations.
Meanwhile, palladium gained 5% to $1,996.72 an ounce after soaring more than 9% earlier.
"There's a lot of talk about auto manufacturers ramping up production. Some traders are probably thinking they're going to get ahead of the curve and start to buy palladium ahead of the ramp-up," U.S. Global Investors' Matousek added.
Production of both platinum and palladium, used to reduce vehicle emissions, and consumption by auto makers could fall by around one-fifth in 2020 but the course of the virus is too uncertain to give precise numbers, materials maker Johnson Matthey said.
Platinum rose 2% to $814.07 an ounce, while silver
jumped 2.7% to $17.06 - with both metals having hit a two-month high earlier.