Spot gold had risen 0.7 per cent to US$1,293.90 (RM5,709.33) per ounce by 0030GMT, after hitting their highest since early November at US$1,295.42.
"Firstly, rising US-North Korea tensions, associated with the country's nuclear ambitions, culminated over the weekend with a (failed) missile test, and increasingly firm messaging from the US, with senior officials remarking that the US" "policy of strategic patience has ended' with North Korea", BMO said in a note.
Mnuchin's expectations of a tax system reform for 2017 which, in his view, would strengthen the American currency, flipped investors' sentiment towards the positive side and made gold slide a bit.
USA gold futures dipped 0.4 percent to $1,286.70.
"As (gold) didn't manage to get through $US1,300 and due to light volumes during (holiday-related) European hours, gold consolidated until weaker US economic data gave the yellow metal another push", said Giovanni Staunovo, commodity analyst for UBS Wealth Management.
Also on the Comex, silver dipped 5.2 cents, or about 0.3%, to $18.22 a troy ounce.
Gold prices stumbled Wednesday as the dollar clawed its way up from the three-week low reached Tuesday.
USA homebuilding fell in March after unseasonably mild weather buoyed activity in February and manufacturing output dropped for the first time in seven months, further indications that economic growth braked sharply in the first quarter.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.1 percent in holiday-thinned trade, while Japan's Nikkei fell as much as 0.6 pct to hit a five-month low before ending up 0.1 percent. The 10-year U.S. Treasury yield was at 2.23 percent.
Futures traders are pricing in around a 40% chance of a hike at the Fed's June meeting, according to Investing.com's Fed Rate Monitor Tool, down from around 60% last week.
USA bond prices were mostly flat. Regional tensions have risen over the past weeks as US President Donald Trump has taken a tough rhetorical line with Pyongyang.
Reduced expectations for a Federal Reserve rate hike in June in wake of recent weakness in USA economic data further burnished the appeal of the yellow metal. It touched its highest since November 11 at $18.65 on Monday.
U.S. Vice President Mike Pence said Washington would work with its allies and China to put economic and diplomatic pressure on North Korea.