Spot gold held steady at $1,273.92 an ounce, as of 0331 GMT. The metal fell to its lowest since Dec. 22 at $1,270 on Tuesday.
U.S. gold futures for August delivery were, however, 0.2 percent lower at $1,276 per ounce.
Gold prices generally gain momentum during times of uncertainty as it is considered a safe place to park assets.
Gold is not doing its part as a safe-haven asset. It is more so the dollar-yen and even the U.S. treasuries rather than gold, said OCBC analyst Barnabas Gan.
The dollar steadied against the yen on Wednesday, as U.S. yields pulled back from lows hit on concerns about a worsening trade feud between Washington and Beijing, although persistent worries about the trade rift are likely to cap any greenback recovery.
China’s stock markets slumped on Wednesday, extending a rout from the previous day as the prospect of a full-blown Sino-U.S. trade war put a dampener on the rest of Asian equities, even as they managed a modest bounce.
Spot gold may test a support at $1,268 per ounce, with a good chance of breaking below this level and falling more towards the next support at $1,258, said Reuters technicals analyst Wang Tao. [TECH/C]
Meanwhile, the European Central Bank President Mario Draghi said the bank will be patient in tightening policy further, adding that market pricings for its first post-crisis rate hike were consistent with its aim to move gradually.
A lone Bank of Japan policymaker said additional easing was needed to accelerate inflation, but most members wanted to keep monetary policy unchanged, minutes from the central bank’s policy meeting in April showed on Wednesday.
In other precious metals, silver rose 0.2 percent to $16.31 an ounce. In the previous session, it hit $16.21, its lowest since May 16.
“Investors are increasingly concerned that metals, which are used in autocatalysts, are at risk of being dragged into the trade conflict between the United States and China,” ANZ said in a note.
Platinum slipped 1.2 percent to $857.10 an ounce. Earlier in the session, it touched $855.25, its lowest since Feb 3, 2016.
Palladium was nearly unchanged at $967 an ounce, after marking its lowest since May 21 at $964.20 on Tuesday.
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