Gold leapt more than 2 percent on Wednesday, reversing earlier losses, as a slide in US equity markets prompted funds to buy bullion as a haven from risk. At the same time, silver fell 5 percent, platinum nearly 5 percent and rhodium more than 20 percent as fears about the global economic outlook added to the perception that demand will fall for precious metals that have an industrial use.
Spot gold was at $843.20/845.70 an ounce at 1439 GMT, up from $835.25 in late New York trade on Tuesday. Earlier it touched a session high of $856.10. "It was a pretty quiet morning session, followed by two movements, one on the downside," Commerzbank senior trader Michael Kempinski said. "The downside was pretty well supported and it looks like some funds just jumped in and pushed the price $20 higher."
"The stock market looks like it is coming off again. We thought the fear was over, but actually it is not," he added. Gold was pressured however by a softening in the oil price, with crude dipping more than $3 at its lowest point on expectations economic weakness will further cut fuel demand. Falling crude prices typically weigh on gold, which is often bought as a hedge against oil-led inflation.
Among other precious metals, spot silver tumbled 5 percent to a session low of $10.15 an ounce, before settling back at $10.45/10.53 an ounce against $10.95. The platinum group metals also fell, with platinum slipping more than 3 percent and rhodium falling more than 10 percent, as investors worried over the demand outlook.
Rhodium shed $700 an ounce as investors sold the precious metal on fears demand from carmakers would fall, and to raise cash to cover losses on other markets. It was quoted at $2,500 an ounce against $3,200 an ounce on Tuesday. Auto manufacturers' association ACEA said European new vehicle sales fell 8.2 percent in September, and US car sales have also fallen, recent figures suggest.
"Car sales are looking grim from everywhere, really, and that is the major home for the majority of rhodium," said one British-based trader. Spot platinum fell to $974.50/994.50 an ounce against $1,017.50 late in New York on Tuesday.
The world's largest producer of the white metal, Anglo Platinum told Reuters that it does not plan to trim metal output despite low prices, which it expects to rebound as fundamentals return to the fore. Spot palladium was quoted at $193.50/201.50 an ounce against $195.