Gold prices fell on Friday and bond yields rose after the European Central Bank (ECB) delivered a hawkish tweak about operation of the Pandemic Emergency Purchase Program (PEPP).
Spot gold fell 0.9 percent to $1,854.28 per ounce, while U.S. gold futures were down 0.6 percent at $1,854.50.
After keeping interest rates at their record-low level and bond-buying at ?1.85 trillion ($2.25 trillion) on Thursday, the ECB signaled that it will not necessarily use the whole package.
"If favorable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full," its statement said.
Also, the increase in yields followed better-than-expected U.S. data on jobless claims and housing starts.
U.S. weekly jobless claims decreased modestly last week, while housing starts rose in December to the best pace since late 2006, separate reports showed.