Gold prices settled in the red on Wednesday, pulling back after posting gains for three sessions in a row as investors eyed moves in the U.S. dollar and awaited the outcome of a bevy of potential market-moving events this week.
"When looking at the political news that lies ahead, the gold market is justifiably apprehensive," said Edward Meir, an independent commodity consultant at INTL FCStone, in a recent note.
On Thursday, the European Central Bank will make its announcement on monetary policy, the U.K. will hold a general election and former U.S. Federal Bureau of Investigation boss James Comey will offer testimony before a Senate panel, which is investigating Russian efforts to interfere in last year's presidential race.
August gold GCQ7, -0.40% fell $4.30, or 0.3%, to settle at $1,293.20 an ounce, with the metal ending lower for the first time in four sessions. Meanwhile, July silver SIN7, -0.43% fell 9 cents, or 0.5%, lower at $17.62 an ounce.
"Markets are nervous about the British election, as polls are all over the place," Meir said. "Most are Showing that Prime Minister [Theresa] May will emerge with a majority, although the size of her lead remains somewhat in question."
Check out: 5 things to know about the U.K. general election
As for the ECB, there are indications that the central bank will "likely tack to a somewhat dovish statement," he said. Dovish language would suggest that the ECB is unlikely to take aggressive actions. But if the statement isn't deemed dovish, "we could see a rather sharp retracement in gold," said Meir.
Read: Why Draghi's ECB can take only baby steps' on monetary policy
And when it comes to Comey's testimony, the thinking is that if he "unveils some sort of a smoking gun', the administration's chances of getting substantial legislation through Congress would prove difficult-a scenario that should be constructive for gold," Meir said.
See: What to watch when James Comey testifies to the Senate on Thursday
Haven commodities have drawn bids amid the rising geopolitical jitters.
Prices for gold, which tends to garner buying during times of uncertainty, gained more than 1% to settle at a seven-month high Tuesday-and a number of other so-called haven assets lured investors. Bond prices rose as the yield on the 10-year Treasury note TMUBMUSD10Y, +0.28% which moves inversely to prices, carved out a fresh November low, at 2.15%.
On Wednesday, however, a gauge of the greenback, the ICE U.S. Dollar IndexDXY, +0.08% which tracks the buck against a basket of six rivals, ticked higher by 0.1%, after falling in the first several days in June. Strength in the dollar can make gold and other commodities-pegged to the currency more expensive to buyers using other monetary units.
Still, the uptrend for precious metals appears mostly intact, as gold is holding near a psychologically significant level of $1,300 an ounce.
Colin Cieszynski, chief market strategist at CMC Markets, indicated that gold may be experiencing a normal pullback after its recent healthy advance, with so-called resistance levels at or near its $1,295-$1,300 an ounce.
Other metals finished mostly lower, with July platinum PLN7, -0.14% down $15.70, or 1.6%, at $947.60 an ounce and September palladium PAU7, -0.13% losing $20.20, or 2.4%, to $828.20 an ounce. July copper HGN7, -0.20% added half a cent, or 0.2%, to $2.552 a pound.
In exchange-traded funds, the SPDR Gold TrustGLD, -0.53% fell 0.7%, the VanEck Vectors Gold Miners ETF was down 1.9%, while the iShares Silver Trust SLV, -0.66% retreated by 0.9%.