The rally in gold prices paused on Tuesday amid steady progress in COVID-19 vaccines and rebounding US economic data.

COMEX Gold futures, the world's leading benchmark futures contract for gold prices, declined by 5.78 percent to $1,921.8 per ounce on Tuesday, the biggest single-day decline since June 2013. The fall comes five days after the gauge hit a historic high of $2,089.2 per ounce.

Spot gold prices fell by 5.7 percent to $1,911.89 an ounce in New York on Tuesday, which was also the biggest single-day drop in over seven years. The New York Stock Exchange-listed Barrick Gold Corp saw its share prices slump by nearly 9 percent.

Russian President Vladimir Putin said on Tuesday that a COVID-19 vaccine was cleared for use, a factor that has eroded the support for gold, said analysts from Xiamen-based ITG Futures Co Ltd. With the research and development of vaccines making further progress, investors' risk appetite will be revived and speculators will close out their gold positions, they said, adding that gold prices will continue to fluctuate in the short term.

Xue Na, a precious metals analyst at Nanhua Futures, said the slowdown in the increase in COVID-19 cases in the US has lowered investors' demand for hedging risks. The recently announced economic indicators, such as the nonagricultural employment index for July, are better than expected and have partly reduced investors' demand for assets such as gold, she said.

Carsten Fritsch, a commodity analyst at Commerzbank AG, said that Tuesday's gold price slump was abrupt and brutal, although the previous price increase was also sudden and sharp. The trigger for the decline could be the sharp rise in bond yields, "which caused some profit-taking and then that cascaded", he said. Yields on the 10-year US Treasury bonds climbed to 0.656 percent, the biggest increase since June.

The higher real interest rate in the United States led to the gold price movements on Tuesday, said Michael Widmer, head of metals research at Bank of America Merrill Lynch.

But Widmer also pointed out that the gold rally has only hit a pause and the bank's $3,000 an ounce 18-month target remains unchanged. The current financial repression, dollar debasement and central banks' backstopping for governments support the bank's bullish outlook on gold prices, he said.

Meanwhile, A-share listed precious metal companies saw their prices slide by 5.77 percent on average on Wednesday, according to Shanghai-based market tracker Wind Info. Partly affected by the sluggish performance of precious metal companies, the benchmark Shanghai Composite Index shed 0.63 percent to close at 3319.27 points, while the Shenzhen Component Index dropped 1.17 percent to 13308.52 points.

The Shanghai Gold Exchange put up a notice on Wednesday to remind investors of the recent price fluctuations of gold and silver due to multiple market uncertainties. Investors should keep their positions at a reasonable level and make rational investment choices, said the exchange.

The World Gold Council said in Beijing on Tuesday that gold is still in the early stages of its price cycle despite the previous record highs. While prices may have been through some ups and downs in the past few days, the WGC still holds a positive outlook on prices for the long term.

Liu Yukun contributed to this story