The outlook for tighter credit was supported by an unexpectedly big rise in U.S. producer prices in October, at the fastest pace in six years.

• “It seems like the bears are back in control... It’s disappointing that every time gold starts to rally it runs out of steam so fast,” a Hong Kong-based trader said.

The precious metal has fallen more than 11 percent from its April peak after investors preferred the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.

Higher U.S. interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.

Spot gold is expected to test a support at $1,201, with a good chance of breaking below this level and falling more to $1,192, said Reuters technical analyst Wang Tao.

• Hedge funds and money managers cut their net short position in gold by 8,136 contracts to 37,486 contracts, data showed.

· In other precious metals, silver was up 0.1 percent at $14.17 per ounce. Prices fell to their lowest level since Sept. 18 at $14.06 in the previous session.

• Palladium fell 0.2 percent to $1,113.92 per ounce.

• Platinum was down 0.1 percent at $848.50 an ounce.