Gold prices retreated further on Wednesday from a key $1,800/ounce level, as a robust dollar and higher US bond yields dented bullion's appeal while investors assessed how central banks would address rising inflation pressures.
Spot gold fell 0.2% to $1,788.40 per ounce by 0351 GMT, declining 1.2% since rallying to a more than one-month high late last week. US gold futures dropped 0.2% to $1,789.30.
Benchmark 10-year US Treasury yields rose, increasing the opportunity cost of holding the non-interest bearing metal.
Spot gold neutral in $1,783-$1,795 range, with downside bias
The dollar also steadied close to a one-week high hit on Tuesday, making gold less appealing for buyers holding other currencies.
Market participants now turn their attention to the Bank of Japan (BoJ) and the European Central Bank (ECB) meetings on Thursday and the pivotal US Federal Open Market Committee on Nov. 3.
"It is almost certain that a start to the Fed taper will be announced and US yields should start to move higher as will the greenback and gold will struggle to hold near $1,800 in this environment," said Jeffrey Halley, a senior market analyst for Asia-Pacific at OANDA.
"Lower real yields however seem to be enough to stop gold from resuming a steep retreat, even if it is not enough to provide gold with the upward momentum required to seriously test resistance at $1,835."
While the Bank of Japan is set to maintain its massive stimulus programme and slash this year's inflation forecast, rising inflation expectations in the euro zone could pose a challenge to the ECB.
Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up.
Spot silver fell 0.5% to $24.01 per ounce. Platinum eased 0.4% to $1,023.48 and palladium edged 0.2% down to $2,007.65.
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