Gold prices fell more than 1 percent for a second day on Wednesday as an extended fall in US Treasury prices fuelled profit-taking from bullion's record run by investors seeking better yield returns. Spot gold traded at $1,382.79 an ounce, down 1.3 percent, at 2:33 pm EST (1933 GMT), having earlier fallen by as much as 2.1 percent to a one-week low of $1,371.45. US gold futures for February delivery settled down $25.80 at $1,383.20 an ounce.
"It really is just good old-fashioned profit-taking," said Credit Agricole analyst Robin Bhar. "This year every time gold makes a new high, it subsequently collapses. Technical selling also accelerated the decline in silver prices, which had jumped to a 30-year high above $30 an ounce, but investment interest remained high as the world's largest silver-backed exchange-traded fund hit another record high. Silver dropped 1.1 percent to $28.34 an ounce, causing the gold/silver ratio to stabilise hear a near-four year low. Gold has lost some safe-haven appeal as, for the first time in weeks, euro zone debt concerns were placed on the back burner and investors focused on US economic fundamentals in a thinning market.
Gold hit an all-time high at $1,430.95 an ounce on Tuesday, but has now fallen by about 4 percent after the rally ran out of steam. Holdings in the No 1 SPDR Gold Trust remained steady despite weaker gold prices, while the world's largest silver ETF, iShares Silver Trust, said its holdings hit another record at 10,941.34 tonnes by Wednesday. Platinum dropped 0.5 percent to $1,680.74 an ounce, while palladium slipped 0.2 percent to $728.50.
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