| NEW YORK/LONDON
NEW YORK/LONDON Gold recovered from a two-week low, buoyed by short-covering on Wednesday as U.S. Treasury yields turned lower and the dollar pared gains after President Donald Trump proposed slashing the U.S. tax rate on corporate profits.
Trump proposed cutting the corporate and pass-through business profits tax rate to 15 percent from 35 percent or more, as well as offering tax cuts to average Americans in a rough outline of his tax policy goals.
Spot gold XAU= was up 0.3 percent at $1,266.81 an ounce by 3:10 p.m. EDT (1910 GMT). Earlier in the session prices hit 1,259.90, their weakest since April 11.
U.S. gold futures GCcv1 settled down 0.2 percent at $1,264.20.
"Gold rallied to session highs on short-covering after the key $1,260 level held multiple times today amid lingering concerns that tax reform could balloon deficits," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"However, tax reform's impact on asset prices and gold could be transitory since the final version of any bill is likely to look starkly different and unlikely to be introduced for months."
The late-day move higher came after bullion spent much of the session little changed.
"The reason we're pausing here is people are trying to figure out what's going to happen with the U.S. economy and rates," said Brad Sanderson, analyst at Cohen & Steers in New York.
Gold prices are down more than 2 percent from last week's five-month high as risk appetite increased on easing geopolitical concerns.
"You had a decent set of risk factors that supported gold over the past few weeks and I'd argue that most of them are priced out of the market again," said Carsten Menke, analyst at Julius Baer in Zurich.
"That's why we believe that prices should reach $1,200 over the next three months."
Holdings of SPDR Gold Trust (GLD), the world's largest gold-backed exchange-traded fund, fell 0.7 percent on Tuesday.
Spot silver XAG= dropped 0.6 percent to $17.44 an ounce, after tapping $17.28, the lowest since March 21.
Platinum XPT= fell 0.2 percent to $948.60, while palladium XPD= rose 1.2 percent to $809.70.
"Palladium bucked the trend and prices were quite strong this week. We believe, however, this is too high, given that we're having a slowdown in global car sales from China and also the U.S.," said Menke.
"The palladium market is too bullish and we're still looking for a correction of at least 10 percent, moving towards $700."
(Additional reporting by Swati Verma and Nallur Sethuraman in Bengaluru, Editing by Jon Boyle and Chizu Nomiyama)