US gold futures dropped in quiet trade on Wednesday as investors took profits after a recent rally ahead of the US Thanksgiving holiday, but worries about longer-term inflation should support prices. December gold falls $5.20 to $813.30 an ounce at 11:07 am EST (1607 GMT) on the Comex division of the New York Mercantile Exchange.
A stronger dollar and initial weakness of the stock markets prompted selling of December futures ahead of first notice day on Friday, traders said. Options market indicating a move to the upside as call prices bid up relative to cheaper puts, Comex floor trader Jonathan Jossen said. Gold should be bolstered as traders focus on possible inflation down the road on the back of market bailout plans, Jossen said.
Spot gold was quoted at $815.05, down 0.6 percent from Tuesday's close. December silver was up 2.0 cents to $10.290 an ounce, failed to get a clear direction from gold. Comex estimated 10:00 am volume at 8,639 lots. Spot silver was at $10.31, up 0.2 percent from Tuesday's finish. Nymex January platinum eases 60 cents to $871.00 an ounce in quiet preholiday trade.
Platinum, which is used as an autocatalyst to clean exhaust fumes from cars, largely unchanged due to lack of news from automakers. Spot platinum fetched $858.50, 0.2 percent lower than Tuesday's late quote. December palladium falls $5.15, or 2.6 percent, to $191.05 an ounce on light profit taking based on persistent demand fears from automakers. Spot palladium fetched $187.50, down 3.6 percent from its previous close.
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