Gold prices declined in European trading on Monday, falling toward a three-week low after U.S. congressional leaders reached an agreement to fund the government through the fall.
Comex gold futures lost $4.50, or around 0.4%, to $1,263.80 a troy ounce by 2:55 AM ET (06:55 GMT). Meanwhile, spot gold was at $1,262.50.
Also on the Comex, silver futures inched down 9.8 cents, or about 0.6%, to $17.16 a troy ounce after touching a more than six-week low of $17.08 earlier in the session.
Trading activity was expected to remain light on Monday, with most markets in Europe, the U.K. and Asia closed for the May Day holiday.
Negotiators in the U.S. Congress reached a deal late on Sunday on around $1 trillion in federal funding that would fund the government through September 30 and avert a government shutdown later this week.
The full House of Representatives and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Donald Trump became president on January 20.
The news boosted risk-sensitive assets, such as global equities, and sparked a sell-off in assets perceived as safe, such as the yen, bullion and U.S. Treasuries, which are often used as a hedge in times of political uncertainty.
Elsewhere in metals trading, platinum shed 0.7% to $942.40, while palladium slumped 0.5% to $822.65 an ounce. Copper futures dipped 1.1 cents to $2.598 a pound as investors digested a soft reading on China's manufacturing sector released over the weekend.
The official manufacturing purchasing managers' index released on Sunday dipped to a six-month low of 51.2 in April from 51.8 in March, below the forecast for 51.6. Anything above 50.0 signals expansion, while readings below 50.0 indicate industry contraction.