US gold futures cut initial losses but still traded lower on Wednesday as liquidation pressure related to option expirations and contract rollover offset a weaker dollar against the euro and rising investment demand. Gold for February delivery was down $6.50 at $893.00 an ounce at 9:47 am EST (1447 GMT) on the COMEX division of the New York Mercantile Exchange.
Range $882.60 to $903.40, near a 3-1/2 month high. Pullback to continue amid rebalancing after option expiration, upcoming first notice day of February contracts, better tone in the stock market, said George Gero, vice president of RBC Capital Markets Global Futures. A bounce in the euro against the dollar kept gold futures from falling further.
Gold pressured by possible positive news from the Davos World Economic Forum and US Federal Reserve's interest rate meeting, both of which could fuel speculation that the economy is alive and well, said Jon Nadler, senior analyst at Kitco Bullion Dealers.Gold market sentiment still bullish as the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, commonly known as GLD, said its bullion holdings held steady at record 832.88 tonnes as of January 27.
Gold future contracts underperformed crude oil in percentage terms on Wednesday. Gold/oil ratio turned lower to 21.4, compared with 21.3 in the previous session. COMEX estimated 9:00 am volume at 93,252 lots and options turnover at 594 lots. Spot gold was at $895.65 an ounce, up 0.2 percent from the last trade on Tuesday.
March dropped 16.5 cents, or 1.2 percent, to $12.010 an ounce on the back of gold's weakness and as investors took a breather after recent rally. Ranged $11.815 to $12.155. COMEX estimated 9:00 am volume at 6,381 lots. Spot silver quoted at $12.04 an ounce, up 0.3 percent from its previous close. Silver fixed in London at $11.98 an ounce.
NYMEX April platinum pared losses but still down $3.70 at $954.50 an ounce as worries about autocatalyst demand offset a stronger stock market. Spot platinum quoted at $954.50 an ounce, up 1 percent from its last finish. NYMEX March palladium inched up $1.00 to $192.00 an ounce in quiet rangebound trade on bargain hunting. Spot palladium quoted at $189.50 an ounce, up 0.5 percent from its previous close on Tuesday.