Gold rose to a one-month high on Wednesday on safe-haven buying after North Korea test-launched several missiles, but lost all its winnings in late trade as a firmer dollar triggered profit-taking.
Dealers saw the metal trading in a broad range, with the US market re-opening on Wednesday after the Independence Day holiday this week.
"It's just profit-taking. There is a lack of direction and it's quite a thin market," said Tony Dobra, a director at Standard Chartered Bank in London.
"When people get out of the holiday mood next week, they will get back to serious business again," he added.
Spot gold rose as high as $630.50 an ounce on buying from speculators, before falling to $619.10/619.30 by 1445 GMT, compared with $621.50/622.50 late in London on Tuesday.
"The major news prompting the latest move up was North Korea's test-launch of seven missiles, elevating tensions in the region and encouraging safe-haven buying into gold," Barclays Capital said in a report.
"Nonetheless, selling interest soon emerged at the higher numbers, indicative of a still uncertain mood clouding the market at present."
North Korea test-fired missiles including a long-range weapon said to be capable of reaching Alaska, ratcheting up tensions in north Asia and drawing international condemnation.
The White House warned North Korea against more "provocative acts" and said the United States would take "all necessary measures" to protect itself and allies.
Investors buy gold as a hedge against inflation and for future sales when holders need cash in times of trouble. Geopolitical risks elevate gold's safe-haven appeal.
In the currency market, the dollar was firmer against most major currencies, boosted by a private sector US employment report that showed solid jobs growth in June.
Platinum was down $1 at $1,228/1,236 an ounce, while palladium fell $1 to $321/326 an ounce. Silver was at $11.20/11.30 an ounce, versus $11.18/11.28.
In industry news, a top official of AngloGold Ashanti Ltd said higher gold prices had allowed it to revive two South African projects that would deepen mines and exploit around 4.1 million more ounces of bullion.
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