Following sharp falls yesterday, the gold price traded near one-month lows Wednesday morning, hovering just above $1570 per ounce by lunchtime in London, as stock markets ticked lower following gains yesterday.
Silver meantime climbed back above $27.30 an ounce, having fallen to an eight-month low below $27, while broader commodities also ticked lower.
A day earlier, gold fell sharply at the start of Tuesday's US trading, continuing to trade lower when Asia opened on Wednesday, with analysts citing stock market gains and better-than-expected US factory orders data as factors weighing on gold.
"The futures market is no doubt mainly to blame for the latest sudden sell-off," says today's commodities note from Commerzbank.
"[Gold's fall] worsened after the US stock market started to move higher [on Tuesday]," adds Ed Meir, metals analyst at brokerage INTL FCStone.
"This was a clear signal that it was safe for more fund money to abandon commodities and head into the red-hot equity markets."
The S&P 500 index came within 0.2% of its 2007 intraday high during Tuesday's trading.
"The US economy is one of the best-performing ones," says Patrick Moonen, senior strategist at ING Investment Management.
"When it comes to the equities rally we've had this year, we think there is still more to come."
"I'd be skeptical about continuing the stronger momentum that we saw in the first quarter," counters Tom Elliott, global strategist at JPMorgan Asset Management.
"It very rarely happens you get two such strong quarters in a row...I think what we'll be seeing is probably investors over the next three months looking for any slight excuse to take profits."
"Gold prices are likely to face more headwinds, should equities continue to rally," says a note from HSBC.
"Furthermore, demand for safe-haven assets, which was a plank supporting bullion prices in late March, [seems] to have eased."
"Ascribing gold weakness to equity strength is shorthand for talking about risk appetite," adds David Jollie, strategic analyst at Mitsui Precious Metals.
"There is certainly a degree of optimism about the US economy, and that should lead to some reductions in gold long positions...there is scope for gold to strengthen if economic data isn't as strong as people are hoping, but at the moment, there's a lack of justification to buy in the short term."
The consensus forecast among analysts is that this Friday's nonfarm payrolls report will show the US economy added 200,000 jobs last month, while the unemployment rate is expected to hold steady at 7.7%.
The world's biggest gold exchange traded fund meantime continued to see outflows Tuesday, with the volume of gold held to back SPDR Gold Trust (ticker: GLD) shares dropping eight tonnes to 1208.9 tonnes, its lowest level since July 2011.
Credit Suisse Wednesday cut its 2013 gold price forecast by 9.2% to $1580 an ounce, while its silver price forecast was cut 11.5% to $28.50 an ounce.
"By long-term historical standards gold remains overvalued, both in real terms and relative to other commodities and assets," Credit Suisse said.
Over in Europe, Cyprus today agreed terms for a €1 billion loan from the International Monetary Fund to add to the €9 billion bailout agreed with other Eurozone members. Cyprus's central bank meantime has unfrozen 10% of deposits over €100,000, the limit above which deposits are not insured.
Looking ahead to Thursday, the Bank of Japan is due to announce its first policy decision since Haruhiko Kuroda took over as governor. Kuroda said last month the BOJ "will do whatever we can do" to end deflation in japan, while the country's prime minister Shinzo Abe said this week that the central bank should "display a strong commitment to create so-called inflationary expectations".
Get the safest gold and silver at the lowest price possible on BullionVault...