Gold prices rebounded from a 4-1/2-month low on Wednesday on short-covering as the US dollar came off its 2018 highs and US bond yields sat near multi-year peaks. Spot gold was 0.2 percent higher at $1,292.19 by 1:39 pm ET (1739 GMT), having gone as low as $1,286.20, its weakest since December 27. US gold futures for June delivery settled up $1.20, or 0.1 percent, at $1,291.50 per ounce.
"A lot of people are trying to cover shorts from the break at the $1,316 level. That was a good area people were betting for the downside," Michael Matousek, head trader at US Global Investors. "Now you want to start taking some profits, because statistically, it looks like it can bounce from the short-term.
"Gold prices barely responded to North Korea saying it might not attend the unprecedented June 12 summit with the United States if Washington continues to insist that it unilaterally give up its nuclear weapons. North Korea also called off high-level talks with South Korea scheduled for Wednesday, blaming US-South Korean military exercises.
But higher 10-year Treasury yields, which stayed near highs hit on Tuesday, capped gold's gains, traders said, as the US dollar came off its highs. Bullion had suffered its biggest single-day loss since November 2016 when it fell 1.7 percent on Tuesday to below the 200-day moving average and the psychologically significant $1,300-an-ounce level.
Gold is likely to fall to $1,275 by the end of June and $1,250 by the end of the year as US yields and the dollar strengthen, said ABN AMRO analyst Georgette Boele. That is below the $1,310-$1,360 range gold has inhabited since January. In other precious metals, silver was up 0.9 percent at $16.37 an ounce after dipping to a two-week low, $16.17. Platinum eased by 0.4 percent at $889.07 per ounce, while palladium gained 0.4 percent at $986.75, earlier dipping to $883.50, a five-month low.