Gold slipped below a lifetime high on Wednesday as the US dollar firmed, while silver regained strength after holdings in the world's largest silver-backed exchange-traded fund hit another record.
US government bond yields rose, lifting the dollar and weighing on commodities after President Obama proposed a deal on tax cuts and unemployment payments that could boost economic growth in the short term but raise debt levels longer term.
Gold fell $9.21 to $1,391.65 an ounce by 0319 GMT.
Trading was volatile on Tuesday, when gold dropped after hitting a lifetime high around $1,430 an ounce on technical selling.
But with the debt crisis in Europe far from over and tensions in the Korean peninsula still brewing, gold could try new highs again, which could lift other precious metals, dealers said.
North Korea fired artillery into its west coast waters on Wednesday, briefly pushing down nervous South Korean financial markets but they quickly recovered after media reports said it was only a military drill.
'It doesn't look like it's bearish. We've just got a bit of profit taking following the dollar. I suspect it will resume its upward movement,' said Darren Heathcote, head of trading at Investec Australia.
'Silver is tracking gold's movements and is a beneficiary of any positive sentiment for gold.' Silver hardly changed after rising to a 30-year high at $30.68 an ounce on Tuesday before falling sharply to hit a low around $28 an ounce. -Reuters
