Gold fell to its lowest level in nearly a week on Tuesday as a stronger dollar outweighed any safe-haven demand from lower equities and heightened tensions over Ukraine.
Palladium hovered near a 13-1/2 year high on fears that possible Western sanctions on Russia could hit supply, while silver tracked gold lower as the dollar hit a seven-month peak against the yen and held near a one-year high against the euro.
The dollar strength ahead of this week's European Central Bank policy meet and US non-farm payrolls data has precious metals traders worried that gold could fall to lower levels in the next few sessions.
"It does seem like gold is struggling. Ukraine tensions remain unresolved and yet gold is below $1,300," said one Hong Kong-based bullion trader.
Gold is often seen as an alternative investment during times of geopolitical uncertainties. "People are concerned about the dollar strength and I think we will trade in a tight range between $1,278 and $1,290 until we get ECB and non-farm payrolls out of the way."
Spot gold fell 0.5% to $1,281.20 an ounce by 0631 GMT, after earlier dipping to $1,280.10 - its lowest since August 27.
Markets are primarily focused on the ECB meeting on Thursday as they seek clarity on the bank's response to a stalled recovery, disappearing inflation and the sluggish pace of reform in the euro zone.
Weak euro zone data, along with the Ukraine crisis and possibility of an imminent policy easing, has kept the euro under pressure, boosting the dollar.
Bullion investors were also eyeing US non-farm payrolls data and the unemployment rate due on Friday to gauge the strength of the world's biggest economy and its impact on the Federal Reserve's monetary policy.
These factors and a stronger dollar have largely offset any safe-haven buying from the ongoing Ukraine crisis.
Ukrainian President Petro Poroshenko accused Russia on Monday of "direct and undisguised aggression" that he said had radically changed the battlefield balance as Kiev's forces suffered a further reverse in their war with pro-Moscow separatists.
Palladium, however, got a boost from the Ukraine crisis as investors fear fresh Western sanctions on Russia could include producers of palladium, which is used in autocatalysts.
Russia accounts for over 40% of global palladium supply. Spot palladium rose nearly 0.1% to $903.97 - a fifth straight session of gains.
The metal climbed as high as $910 on Monday, its highest since 2001, before paring some gains to close up 0.5%.
"While there haven't been any metal-related restrictions just yet, disruptions in Russian supply could have a significant impact on the global availability of palladium," ANZ analysts said in a note.