LONDON - Gold prices were driven lower for a third day on Thursday by a strong dollar and rising U.S. bond yields.
A global stock market selloff has driven investors to the relative safety of the dollar, lifting it from three-year lows and pushing gold from an 18-month high reached in late January.
Inflation-linked U.S. 10-year bond yields meanwhile rose to two-year highs after a hawkish Bank of England statement fuelled expectations that central banks around the world will raise interest rates.
"The increase in real bond yields has been pressuring gold, on top of the rebound we have seen in the dollar," said Julius Baer analyst Carsten Menke.
A stronger dollar makes dollar-denominated bullion more expensive for users of other currencies, while higher real yields reduce the attraction of non-yielding gold.
Spot gold hit a one-month low and was down 0.4 percent at $1,313.14 an ounce at 1525 GMT. U.S. gold futures for April delivery were 0.1 percent higher at $1,315.70.
Momentum indicators suggested gold would fall to $1,300, said analysts at ScotiaMocatta, with technical support at $1,303, the 50-day moving average.
Holdings of gold in exchange-traded funds tracked by Reuters have declined more than 1 percent this month and this week saw the biggest one-day fall since July, helping pull prices lower.
Adding to the pressure were comments by Federal Reserve officials that stock market turbulence was unlikely to derail interest rate rises this year.
The case for higher U.S. rates was bolstered on Thursday by data showing an unexpected fall in unemployment.
Higher rates are negative for gold because they push bond yields higher and tend to strengthen the dollar.
However, analysts polled by Reuters said they did not expect the dollar to rebound this year, despite expectations of at least three rate rises. They forecast the dollar index to end this year at 88.7, compared with around 90.3 on Thursday.
In other precious metals, silver was down 0.1 percent at $16.36 an ounce after touching $16.22, the lowest since Dec. 22.
Platinum traded at one-month lows, down 0.6 percent at $973.60 an ounce.
Palladium was 0.9 percent lower at $975.47 an ounce after reaching its lowest since Nov. 15 at $974.72.
Having risen 56 percent last year to an all-time high in January, palladium, used in catalytic converters to control vehicle emissions, has fallen below technical support at its 55-day moving average and broken an 8-month uptrend, said analysts at Commerzbank.
"The market has topped as we suspected," they said, predicting prices could slide to $940.40, palladium's 200-day moving average.