Gold fell to a 1-1/2-week low on Wednesday, erasing earlier gains as the dollar index jumped, though a retreat in global stocks after Tuesday's record high prevented deeper losses. Spot gold was down 0.65 percent at $1,322.91 an ounce by 2:34 pm EDT (1834 GMT), after falling to the lowest since September 1 at $1,320.51.
US gold futures for December delivery settled down 0.4 percent at $1,328. "We had a lot of positions put on last week up at the highs, and those were weak short-term positions. We've seen a lot of them taken off," said Bill O'Neill, partner with Logic Advisors in Saddle River, New Jersey, referring to gold's roughly one-year high reached last week.
"We're not in a fearful flight to haven atmosphere this week. We're in a calmer, little more cautious tone and that's weighing on gold." The metal's move lower came as the dollar index turned higher after a report showed US producer prices rebounded in August and as traders turned their focus to US consumer inflation data. Among other precious metals, silver was down 0.8 percent at $17.77 an ounce. Platinum was 1.2 percent lower at $975.05 an ounce, after falling to $973, the lowest since August 28. Palladium fell 1.7 percent at $938.