Gold declined on speculation that an economic recovery will curb demand for the metal as an alternative investment.
The dollar gained against the euro after a U.S. Labor Department report showed the U.S. jobless rate unexpectedly fell to 9% in January. Earlier, gold reached a two-week high of $1,361 U.S. an ounce as the mounting conflict in the Middle East boosted demand for a haven.
Gold futures for April delivery fell $4.60, or 0.3%, to $1,348.40 U.S. an ounce at noon ET on the Comex in New York. Before today, the price dropped 4.8% this year.
An improving labour market "would present a downside risk for metal prices" on the prospect that the Federal Reserve would tighten monetary policy, Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said in a report.
Yesterday, gold held in exchange-traded products rose 0.87 metric ton to 2,028.9 tons, snapping an eight-session slide, data compiled by Bloomberg from 10 providers show. Holdings have dropped 3.3% this year. They reached a record 2,114.6 tons in December.
