Gold steadied in line with oil on Thursday as an overall firmer dollar dampened the bargain hunting that had supported the metal after its earlier two-week low. Gold was little changed at $922.80/923.80 an ounce at 1351 GMT from $921.35/922.95 late in New York on Wednesday.
Earlier in the session the precious metal hit an intraday low of $916.40 - its weakest since July 9. "Gold remains on the defensive following the shift in sentiment after the start of this week," said Jon Nadler, senior analyst at Kitco Bullion Dealers in Montreal. "The $915 area remains a support zone that must hold lest the metal next tries to find buyers under $900 per ounce."
Investment interest in the precious metal remains relatively soft compared with recent months. Gold holdings of the SPDR Gold Trust, the world's largest exchange-traded fund backed by physical bullion, slipped 2.5 percent yesterday, the fund said. Its holdings have fallen nearly 5 percent in the last two days to 673.40 tonnes, against more than 700 tonnes at the beginning of the week.
Analysts remain bullish on prices for the remainder of the year, however, with a poll of 40 analysts and traders conducted by Reuters showing on Thursday a mid-range forecast of $930.00 an ounce, 30 percent above last year's average price.
Platinum and palladium also remain under pressure amid fears over demand from car manufacturers, with both metals near six-month lows. Platinum prices in particular have slipped sharply over the last 10 days. The metal is currently trading nearly 25 percent below its March record high of $2,290 an ounce.
Both platinum and palladium are widely used in car manufacturing as a component in catalytic converters. As well as the weaker demand outlook, the metals are also reacting to easing fears over supply from South Africa, which produces four out of every five ounces of the world's platinum.
With the power situation in the republic, which earlier this year took prices to record highs, now looking more stable, analysts see further downside to the metal. "We still see all of the platinum group metals as vulnerable to further liquidation by physical holders of the metal, the ETF players in particular," said J.P. Morgan analyst Michael Jansen.
Spot platinum touched a session low of $1,702.00 an ounce, its weakest level since January 31, before recovering slightly to trade at $1,714.50/1,734.50 against $1,744.00/1,764.00 an ounce in New York.
Spot palladiumwas unchanged at $383.00/391.00 late in New York, having earlier touched an intraday low of $371.50, its weakest since January 25. Among other precious metals, spot silver traded slightly higher at $17.39/17.45 an ounce, against $17.33/17.38 late in New York on Wednesday.