Gold turned lower but held above the previous day's eight-week low on Wednesday as US President Trump's abrupt firing of FBI chief James Comey weighed on US stocks, though gains were capped by expectations of further interest rate increases. US equities paused and the dollar eased as risk appetite faded on concerns that Trump's dismissal of Comey could make it harder for him to push through tax reform plans.

Spot gold was down 0.2 percent at $1,218.95 an ounce by 1:47 pm EDT (1747 GMT), holding above Tuesday's two-month low at $1,213.81 but turning lower as US Treasury yields turned up. US gold futures for June delivery settled up 0.2 percent at $1,218.90. "(This) looks like an attempt at stabilization today after the sharp losses in the preceding days," Commerzbank analyst Carsten Fritsch said. "Trump's firing of FBI Chief Comey adds new uncertainty, (and) stock markets seem to pause."

Trump attributed his decision to sack Comey, who had been leading an investigation into the Trump campaign's possible collusion with Russia during the 2016 election, to the FBI chief's handling of an investigation into presidential nominee Hillary Clinton's emails.

Rival Democrats said that Trump had political motives for the move. "The unpredictability of both Trump and North Korea has been a reminder that geo-risk has not disappeared but temporarily gone into hibernation," said Saxo Bank's head of commodity research, Ole Hansen. Silver was up 0.1 percent at $16.16 an ounce. Platinum was up 1 percent at $910.30 and palladium rose 0.4 percent to $798.98.

Copyright Reuters, 2017