Gold fell on Thursday, extending its drop from a recent record high as signs of progress on debt deals in Europe and the United States drew investors to riskier assets at the expense of safe havens.
Bullion came under pressure after the White House said it saw momentum for a "balanced" deficit deal, but denied that US President Barack Obama and the House of Representatives speaker were close to a pact. Gold is up 6 percent in July largely due to uncertainty over the US debt talks.
Silver tumbled more than 2 percent as draft conclusions of Thursday's emergency summit showed eurozone leaders were set to give their financial rescue fund new powers to fight debt contagion. The S&P 500 rallied 1.5 percent.
Spot gold fell 0.7 percent to $1,588.54 an ounce as of 3:18 pm EDT (1918 GMT), around $20 below its record $1,609.51 set on Tuesday.
US gold futures for August delivery settled down $9.90 an ounce at $1,587, after trading between $1,584.90 and $1,605. Trading volume topped 220,000 lots, set for one of the market's busiest days since late May.
Spot silver dropped 2.3 percent to $39.17 an ounce. Platinum was up 0.6 percent at $1,782.50 an ounce, while palladium rose 1.4 percent to $803.55 an ounce.