Gold dropped a shade on pressure from tumbling oil prices on Wednesday, after nudging up to a seven-week high as equity markets surrendered earlier gains to turn lower and the dollar extended losses versus a basket of currencies. "The weak oil prices sapped some of the strength out of the gold market," said James Steel, chief metals analyst for HSBC Securities in New York.
"The weak equities and the stronger euro were positive, and that kept the losses to a minimum." Spot gold eased 0.2 percent to $1,228.00 an ounce by 3:39 pm EST (2039 GMT). Overnight it hit a peak of $1,238.20, its highest since October 23, having risen more than 2 percent on Tuesday as the dollar and equities fell. US gold futures for February delivery settled down $2.60, or 0.2 percent, at $1,231.80 an ounce.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37 percent to 721.81 tonnes on Tuesday. The fund's holdings remain near six-year lows, however, as bullion investors worry that an expected increase in US interest rates could dull demand for the metal. Platinum was down 0.3 percent to $1,241.95 an ounce. Silver was up 0.2 percent at $17.08 an ounce, and palladium was up 0.8 percent to $814.22 an ounce.
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