Gold slipped as the US dollar gained against the euro and worries about demand weighed on oil, driving investors away from bullion ahead of the release of US nonfarm payrolls data later this week.
Fears of a severe global recession have curbed investors' appetite for risky assets, while recent terror attacks in India that killed nearly 200 people failed to stir up safe-haven buying. Gold was 25% below March's record of $US1,030.80.
''It seems to me that gold has almost been pushed to the side a little bit by investors at the moment. I suspect institutional investor interest is probably pretty tepid,'' said David Moore, commodities strategist at Commonwealth Bank of Australia in Sydney.
''Gold hasn't performed as some people thought it might in the current environment.''
Gold was trading at $US771.30 an ounce, down $US1.30 from New York's notional close, after hitting an intraday high of $US775.35. Gold posted its biggest daily%age fall in almost eight weeks on Monday on falling oil and firm dollar.
Oil fell below $US46 a barrel to its weakest in nearly four years as fears of deepening economic woes overshadowed bullish weekly US oil stocks data.
Investors awaited the release of US nonfarm payrolls numbers on Friday, which could set the tone for the dollar after gains in the US currency sparked selling in bullion. The euro fell to $US1.2690 against the dollar.
''I think the data is going to be very important for broader commodity markets. How it will affect gold, I don't know, but I suspect we could be waiting for pretty weak payrolls numbers,'' said a dealer in Sydney.
As investors braced for the payrolls data, the European Central Bank is seen cutting rates on Thursday, by at least 50 basis points, to 2.75%.
US payrolls probably shed 316,000 jobs in November, following October's drop of 240,000 jobs, according to economists polled by Reuters. The unemployment rate is seen rising to 6.8% in November from October's 6.5%.
''I guess gold will trade sideways for quite a while. For the very near-term, I think a move below Tuesday's lows of $US761 levels may trigger further sales,'' said a dealer in Singapore.
''Strong upside resistance will come in around the $US800-$US810 regions,'' said the dealer, referring to the 100-day moving average.
Gold was struggling to sustain gains since falling to a 13-month low of $US680.80 in late October. A rebound to a six-week high around $US830 late last month was met by heavy selling.
Platinum was trading at $US788.00 an ounce, down $US5.50 from New York's notional close. Platinum has more than halved since spiking to a lifetime high of $US2,290 in March on weaker gold and oil and recently, dismal car sales.
US Senate Majority leader Harry Reid wants to try to find a way to avert threatened bankruptcies in the US auto industry with Detroit Three chief executives readying for a make-or-break hearing on Thursday on a $US34 billion bailout request.
More than 60% of global platinum use goes to autocatalysts to clean exhaust fumes.
New York gold futures added $US1.8 an ounce to $US772.3 in electronic trade.
