Bengaluru — Gold prices fell below the key $1,300 level on Thursday as a firm dollar and improved risk appetite on the back of a rise in European airline stocks pulled investors away from bullion.

Spot gold was down 0.8% at $1,296.94 an ounce by 12.38pm GMT. It had touched its highest level since March 28 at $1,310.50 on Wednesday. US gold futures were about 0.9% lower at $1,302.70 an ounce.

Gold is being pressured by “the recovery in the risk appetite, some optimism on the trade front and a firm dollar”, said Ryan McKay, commodity strategist at TD Securities. The dollar rose 0.1% against a basket of leading currencies.

European shares advanced on Thursday, helped by a rise in airline stocks, after EU leaders gave Britain another six months to leave the bloc.

Dovish views from major central banks on Wednesday failed to help gold. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

“Dovish central banks have been baked into the cake right now. Gold markets have known of this for a couple of months,” McKay said.

The US Federal Reserve’s minutes restated its view on the risks of a global economic slowdown, while the European Central Bank (ECB) kept its ultra-easy monetary policy unchanged.

“In the near term, I am a little bit bearish on gold. I think a break below $1,280 an ounce could trigger a potential move towards $1,260-$1,240,” Oanda senior market analyst Craig Erlam said.

The US and China have largely agreed on a mechanism to police any trade agreement they reach, including establishing new “enforcement offices”, US treasury secretary Steven Mnuchin said on Wednesday.

Spot platinum was down 0.2% at $899.29 an ounce. Palladium was down 1% at $1,373.85 an ounce, while silver slipped 1.2% to $15.02.