By Nakul Iyer
Gold slipped 1% on Monday, with a lull in the dollar's rally offering little respite as U.S. equities gained and U.S. Treasury yields remained near a one-year peak.
Spot gold had fallen 0.4% to $1,737.16 per ounce by 10:49 A.M EDT (1449 GMT).
U.S. gold futures fell 0.4% to $1,735.10.
"Gold should be higher yet it's not- that really speaks to a weak market if normal correlations (like a weaker dollar) are not holding up," said David Madden, analyst at CMC Markets UK, adding gold could slip further if the dollar and yields advance.
Gold fell as much as 1% to $1,727.01 earlier as investors flocked to the dollar and government bonds, spooked by Turkey's abrupt decision to replace its central bank head with a critic of high interest rates.
"If (Turkish) citizens are concerned that the lira is weak, they'd look to buy U.S. dollars or gold, but this is where the fear comes - that capital controls will stop money coming into the country ...it could be tricky for people to get their hands on dollars, and in turn gold, in the next few weeks," CMC's Madden said.
Turks have flocked to hard currencies and gold in recent years, importing $26.6 billion worth of the metal in 2020, around double that of a year earlier.
Gains on Wall Street also pressured gold, the lustre of which has been hurt by elevated U.S. benchmark Treasury yields, which dim the non-yielding metal's appeal.
"Traders want to see gold above $1,750 and hold there before you start to see new money coming into this trade," said Bob Haberkorn, senior market strategist, RJO Futures.
But chances the U.S. Federal Reserve may stick to low-interest rates for the next few years should lead to "significantly" higher gold and silver prices by end-2021, he added.
Meanwhile, palladium dropped 1.3% to $2,602.69 per ounce, silver fell about 2% to $25.73 and platinum shed 0.8% to $1,186.51.
(Reporting by Nakul Iyer in Bengaluru; Editing by Kirsten Donovan)