Gold fell in Europe on Wednesday, with its investment appeal dulled slightly as the dollar won its struggle to move away from lows reached on scaled back US rate rise expectations, dealers said.
By 1445 GMT spot gold had fallen to $401.60/402.10 per troy ounce from New York's late quote on Tuesday of $404.20/404.70.
Data in the previous session showed US consumer prices fell in July for the first time since November, causing the dollar to drop as investors questioned whether the Federal Reserve would raise interest rates next month.
Gold rose after the data as the falling dollar made the metal cheaper for non-US investors.
The dollar recovered slightly on Wednesday as traders found no conclusive reason to sell or buy in the absence of more data.
Analysts were upbeat on the immediate prospects for gold - looking for speculators to step in and take the market higher.
"Speculative and investment positioning in gold remains modest and there is plenty of potential for funds to lift the yellow metal higher, with the likely driver further weakening of the US dollar," UBS Investment Bank analyst John Reade said in a report.
"We continue to forecast gold at $395/oz in one month and $420/oz in three months," he added.
Dealers expected the market to stay in a fairly tight band ahead of a key US jobs report later in the month.
"Gold has made a good base. We expect it to stay between $402.50 and $404.50 today, which is relatively narrow," a trader said.
Gold has been supported around $400 this week, but the market is still some way off the heights reached in January, when the market hit a 15-year peak at $430.50 as the euro surged against the US currency.
Silver dropped back with gold to $6.63/6.66 from $6.70/6.73 quoted late in New York on Tuesday.
Profit-taking took spot platinum away from the four-month peaks reached on Tuesday to $853.00/858.00, from $878.50/883.50 previously.
Palladium was steadier at $215.00/220.00 versus $213.50/219.50 late in New York.
Comments
Comments are closed.