Gold futures were down in early trading hours on Wednesday as market participants awaited for a fresh batch of economic data later in the day, with focus on US inflation figures.
On the Comex division of the New York Mercantile Exchange, gold futures were lower 0.14 percent to $1.281.10 a troy ounce as of 07:05 GMT.
The yellow metal ended in green territory on Tuesday as market participants added bullish positions due to increasing concerns on the political sphere and as the dollar extended losses.
But gains for gold were capped by upbeat economic data from the United States. The Labor Department said its producer price index for October increased by 0.4 percent. On yearly basis, the index was up 2.8 percent from a previous month rise of 2.6 percent.
A better-than-expected wholesale inflation boosted expectations for further monetary policy adjustments from the US Federal Reserve.
According to CME Group’s FedWatch tool, traders are pricing in more than a 90 percent chance of a 25 basis points interest rate move in December.
Demand for safe-haven assets was boosted this week by several political crisis in the Middle East, concerning the Saudi-Iran relations, and in Europe, where UK Prime Minister Theresa May is facing sort of a rebellion against her within her own Labor Party.
According to the Commodity Futures Trading Commission, net long positions on gold increased to 195,800, from 193,100 in the week ended November 10.
Top representatives from the Federal Reserve, European Central Bank, Bank of England and Bank of Japan promised on Tuesday to keep guiding investors out of monetary stimulus.
Ahead in the day, attention will be directed to another batch of economic reports in Europe and the United States, starting with employment data from the UK at 09:30 GMT and the EU trade balance for September scheduled at 10:00 GMT.
In the US, focus will be inflation. The consumer price index for October is due for release at 13:30 GMT, with a 0.1 percent month-on-month build seen.
The NY Empire State manufacturing index for Nov is also set for that time, as well as retail sales for Oct. Business inventories for Sep are up at 15:00 GMT, with a forecasted rise of 0.1 percent.