Gold dipped on Wednesday, losing momentum due to profit-taking after it soared by the most in over two months in the previous session on economic data that weakened the case for an imminent US rate hike. US services sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slower economic growth that further diminished prospects for a near-term interest rate increase. Meanwhile, US non-manufacturing new orders index for August fell to their lowest since December 2013.
Spot gold was down 0.3 percent at $1,345.32 per ounce by 2:17 pm EDT (1817 GMT). The metal earlier touched a high of $1,352.65, its best since August 19. US gold futures slipped 0.3 percent to end the session at $1349.2 per ounce. Gold prices soared in 2016 to touch a high of $1,374.91 an ounce early in July after Britain's shock vote to leave the EU created a heightened sense of uncertainty. But prices have since eased, falling below the key $1,300 level early this month.
"The fact that recent weakness in the price has not translated into a wave of selling - not yet at least - suggests that the underlying investor sentiment towards gold remains stable," Societe Generale analysts said in a note. "The possibility of a further delay in the Fed's tightening plans - along with expansionary policies and negative rates from other major central banks - continue to generate favourable sentiment towards gold."
Silver was down 1.3 percent at $19.77 per ounce after touching a more than three-week high of $20.13. Platinum fell about 1 percent to $1,084.99 per ounce after hitting a two-week high of $1,105.80. Palladium was down 1.1 percent at $687.60 after touching an over two-week high of $708.40.
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