Gold futures fell for the second day on Wednesday in New York as the dollar strengthened, lowering the appeal of the precious metal as an alternative investment.
The contract was at its lowest levels in almost two weeks as a less-than-expected decline in new orders for U.S.-made durable goods helped provide support for the U.S. dollar.
Gold for June delivery lost $7.40, or 0.8 percent, to close $900.50 on the Comex Division on the New York Mercantile Exchange. The contract hit a low of $889 during intraday trading, the lowest level since May 15.
The recovery in oil proved to be the determining factor for today's mitigation of damages in the gold pit, said Jon Nadler, a senior analyst at Kitco Bullion Dealers.
The dollar gained on Wednesday after a report showing orders for durable goods fell a milder-than-expected 0.5 percent in April.
The dollar index, which tracks the greenback against a basket of major currencies, was up 0.3 percent to 72.605.
A stronger dollar has been adding pressure to commodities prices this week.
Dollar strength typically pressures dollar-denominated commodities, such as gold and crude oil, as it makes them more expensive for holders of other currencies.
Meanwhile, crude futures also gained in morning trading and then dropped to a one-week low of $126.75.
With oil falling, gold was bound to come under pressure and should oil continue to fall, then gold may come under pressure, said Mark O'Byrne, executive director of Dublin, Ireland-based Gold and Silver Investments, in a research note.
However, gold is likely to outperform oil in the medium to long term, he said. Strong physical demand internationally is likely to cushion the sell-off and result in gold finding strong support again between $850 and $870.
Also on the Nymex, silver prices fell from earlier gains to end with a loss, extending the previous session's more than 4 percent decline. Silver, which has wider industrial applications than gold fell 6 cents to finish at $17.415 an ounce.
July platinum fell $61.20, or 2.9 percent to end at $2,066.90 an ounce while June palladium shed $7.70 to close at $436.25 an ounce. July copper lost 2 cents to close at $3.70 a pound.