Gold extended declines from the highest level in three weeks as ebbing tensions in the Middle East and Ukraine boosted global equities, damping demand for the metal as an alternative investment.
Gold for immediate delivery fell as much as 0.2 percent to $1,306.48 an ounce, and traded at $1,306.87 at 11:25 a.m. in Singapore, according to Bloomberg generic pricing. Approval of U.S. air strikes in Iraq sent the metal on Aug. 8 to $1,322.76, the highest since July 18. Prices have since retreated as haven demand decreased.
Geopolitical risks in Ukraine, Iraq and Gaza helped gold rebound this year after prices lost 28 percent in 2013 on speculation the Federal Reserve will cut stimulus. A gauge of global equities rallied the most since April yesterday on optimism the conflict in Ukraine will ease and that U.S. air strikes in Iraq will push back militants. A truce in Gaza between Israeli forces and Hamas fighters held as parties returned to talks in Cairo.