Precious-Gold dropped from 3-1/2 month high on Tuesday as the recent rally has encouraged some profit taking by investors.
Last week, gold locked 4.2 percent advance, which helped the metal to rally to its highest in 3-1/2 months, where the metal has recorded, so far, 9.3 percent gain this year after falling 28 percent in 2013.
Over the previous eight week, the metal succeeded in achieving seven weekly gains, taking advantage of the drop in equity markets.
Gold has benefited from the weak economic data in the U.S. as well as emerging markets rout after the breach of solid resistance at $1300 an ounce.
Meanwhile, the yellow metal is trading around $1318.04 an ounce after hitting a high of $1331.88 and a low of $1316.02.
Still, there is uncertainty regarding the future of Fed stimulus taper as while Fed Chairman Janet Yellen said recovery in the labor market is incomplete, she stressed that stimulus would be cut in “measured steps.”
The cold weather was accused of the slowdown in the recent economic data, and thereby the upcoming fundamentals could show improvement.
Hence, the focus in the coming period would remain on U.S. data and March’s Fed monetary decision.
The U.S. dollar inched up against a basket of major currencies to hover around 80.22 after hitting a high of 80.25, according to the dollar index.
Crude oil for April’s delivery ticked down to trade around $100.69 a barrel after setting a high of $100.99.