Gold down in London

Gold eased on Wednesday as soft euro zone economic data and persistent concerns over Europe's finances hurt the euro and weighed on stock markets, while a supply upset in major producer South Africa lifted platinum to five-month highs. Spot gold was down 0.3 percent at $1,753.60 an ounce at 1531 GMT, having earlier touched a high of $1,759.84, while US gold futures for February delivery were down $3.10 an ounce at $1,755.40.
The euro struggled for traction versus the dollar, retreating from the previous day's nearly two-week high as optimism over a long-awaited Greek bailout deal quickly gave way to worries about economic growth and implementation risks. The 130 billion euro ($172 billion) rescue package for Greece agreed by euro zone finance ministers on Tuesday came at the cost of forcing Athens to commit to unpopular cuts and private bondholders to take bigger losses.
"The Greek bailout was mostly priced in," said VTB Capital analyst Andrey Kryuchenkov. "The latest rebound has run out of steam, so we are consolidating today with little direction." He said fresh weakness in the dollar against the euro or outright risk aversion caused by a further credit event in the euro zone would be necessary to push gold significantly higher.
European shares retreated from early highs, and safe-haven German Bund futures rose after weaker-than-expected economic data and as investors worried about the tough task Greece faces to implement the budget cuts required. A retreat in risk appetite also weighed on other commodities such as copper and oil.
"Even assuming the new Greek programme proceeds as planned, the Greek government crisis is far from over," said HSBC in a note. In the longer term, gold is expected to continue benefiting from low US interest rates, central bank buying and strong demand from major markets such as China. Goldman Sachs reiterated its positive 12-month view on gold on Wednesday.
"We expect US real interest rates to remain lower for longer given our US economics team's expectation for US economic growth to remain slow through 2012," it said. Among other precious metals, silver was down 0.5 percent at $34.10 an ounce. Spot platinum was up 1.7 percent at $1,712.50 an ounce, while spot palladium was up 0.9 percent at $713.75 an ounce. Platinum prices rallied to their highest since September 22 in earlier trade at $1,716.50 an ounce, lifted by ongoing unrest at one of the world's biggest platinum mines, Impala Platinum's Rustenburg facility.
A violent labour dispute at the mine has already cost Implats at least 80,000 ounces in lost output. Implats has warned customers that its April platinum deliveries would be down about 50 percent due to the strike. Platinum narrowed its historically unprecedented discount to gold to around $40 from $230 in January.
Nonetheless, with demand for the white metal from automakers still weak, prices are unlikely to spike significantly higher on the outage, analysts said. "We think a slow return to production at Impala's Rustenburg operations over the next month is likely, with total lost output expected to exceed 100,000 ounces of platinum and 45,000 ounces of palladium," said Credit Suisse in a note.