European shares slipped slightly from the 20-month highs they hit in the previous session, as investors locked in some profits following some underwhelming company results.
Meanwhile, gold prices on Wednesday hovered near a three-week low hit in the previous session as the dollar firmed on expectations that the U.S. Federal Reserve may raise rates in June.
In equities, Europe’s STOXX 600 index was down 0.2 percent by 0725 GMT. France’s CAC 40 and Germany’s DAX fell 0.3 and 0.1 percent, retreating from their highs.
Hugo Boss shares fell 6 percent, with traders citing like-for-like sales slightly underperforming expectations. The German fashion house added to signs of a pick-up in the luxury sector, reporting a better than expected profit boosted by strong sales in Britain and China.
In the gold market, spot gold was down 0.2 percent at $1,254.36 per ounce, as of 0717 GMT. Bullion on Tuesday hit $1,251.37 per ounce, its lowest since April 10.
U.S. gold futures fell 0.1 percent to $1,255.40 an ounce.
The U.S. Federal Reserve concludes its two-day meeting on Wednesday and is largely expected to hold interest rates steady; however, it might focus on future rate hikes.
The dollar traded below a six-week high against the yen, while the dollar index, in which gold is priced, was up 0.1 percent at 99.058.
“The Fed meeting is the next likely catalyst for gold. There is a good chance that gold will stay range-bound around $1,245-$1,265 for sometime unless the markets take a major lead out of the meeting,” said Jordan Eliseo, Chief Economist with ABC Bullion, Australia.
“Global tensions regarding North Korea has dissipated a bit and that’s why we have seen a pull back in prices, which has been a healthy one as the markets looked a bit over extended,” Eliseo said.
Higher rates would reduce demand for non-interest bearing gold and would also make the dollar-denominated metal more expensive for buyers paying with other currencies.
“If the Fed mirrors the stance of what other central banks have been doing over the past week and tacks to a more accommodative stance, we could see gold experience something of a bounce,” INTL FCStone analyst Edward Meir said.