Gold prices fell on Wednesday to their lowest in more than three weeks as elevated U.S. Treasury yields and a rising dollar kept the metal on track for its biggest quarterly drop in over four years.
Spot gold was down 0.3% to $1,679.41 per ounce by 0438 GMT, after hitting its lowest since March. 8 at $1,677.61. It has declined more than 3% so far this month and 11.4% during the quarter.
U.S. gold futures were down 0.4% to $1,679.10 per ounce on Wednesday.
"Gold looks vulnerable today and I mostly put it down to the U.S. dollar's strength seen overnight," said OANDA senior market analyst Jeffrey Halley.
"The dollar's rally is gaining momentum and unfortunately, after holding its own for the past couple of weeks, gold is in danger of invalidating its attempt to trace out a longer-term bottom."
The dollar index rose to its highest in nearly five months against rivals and was on track for its best month since November 2016.
The U.S. 10-year Treasury yield held close to a 14-month peak hit in the previous session and was on track for a fourth straight monthly gain.
Higher returns on bonds increase the opportunity cost of holding non-yielding bullion.
"Logically speaking, the amount of stimulus coming on should drive inflation expectations higher and that should be positive for gold," said Howie Lee, an economist at OCBC Bank.
"But at the same time, they cannot be adequately absorbed by the market and it drives yields higher and also bolsters sentiment, which is negative for gold."
Next week, U.S. President Joe Biden is set to unveil a multitrillion-dollar plan to rebuild America's infrastructure.
U.S. consumer confidence surged in March to its highest level since the start of the pandemic, supporting views that economic growth will accelerate in the coming months.
Elsewhere, silver shed 0.6% to $23.87, while platinum rose 0.3% to $1,157.76. Palladium gained 0.8% to $2,609.48 and was on track for its best month since February 2020.