Spot gold was 0.7% lower at $1,780.36 per ounce by 12:54 p.m. EDT (1654 GMT), after hitting its highest since Feb. 25 at $1,797.67. U.S. gold futures dipped 0.7% to $1,780.90.
"$1,800 was a bit of a psychological resistance, so we've come back with tests... The dollar and the 10-year (yields) are both a little bit higher and that's pressuring gold as well," said ED&F Man Capital Markets analyst Edward Meir.
The dollar was up 0.1% versus a basket of other major currencies, with the 10-year yield rising as far as 1.587%.
Gold has dropped 6% so far this year, mostly pressured by rising yields.
The downside in gold is likely to be short lived amid central bank buying and increasing demand for physical gold from China and India, said Bob Haberkorn, senior market strategist at RJO Futures.
Switzerland in March recorded its biggest monthly gold exports in ten months as shipments to India jumped.
But clouding that outlook was a record COVID-19 surge in the country.
Also dimming bullion's appeal was data showing a drop in claims for unemployment benefits last week, strengthening expectations for another month of job growth in April.
Meanwhile, palladium eased off a record high of $2,891.50 per ounce and was last down 1.7% at $2,827.20.
"If you are long palladium and platinum right now, it's the perfect storm for price increases, because there's a very tight supply and the demand is increasing, especially from the auto sector," said Kevin Rich, Global Gold Market Advisor for The Perth Mint.
Many analysts expect a further run towards $3,000.
Silver slipped 1.6% to $26.14 per ounce and platinum fell 0.7% to $1,205.89.
(Reporting by Eileen Soreng and Bharat Gautam in Bengaluru;Editing by Elaine Hardcastle, Kirsten Donovan)
By Eileen Soreng
