Gold prices eased on Thursday as the dollar clawed back lost ground against the euro, denting interest in the metal as an alternative to the US currency. A decline in the equity markets in early trade dented appetite for risk, benefiting the dollar at the expense of higher-yielding currencies.
Spot gold was bid at $1,051.60 an ounce at 1402 GMT, against $1,058.35 late in New York on Wednesday. US gold futures for December delivery on the COMEX division of the New York Mercantile Exchange fell $12.20 to $1,052.30. Pradeep Unni, a senior analyst at Richcomm Global Services, said dollar weakness was still likely to hold the metal in a range between $1,044 and $1,071, but added that consolidation may be necessary before another push higher.
Demand for physical gold remained slow, with jewellery buying tailing off in major consumer India after last week's festival period and as a decline in the rupee made dollar-priced assets more expensive. "Post-Diwali, demand has turned slack," said a dealer with a bullion-dealing bank. The world's largest gold exchange-traded fund, the SPDR Gold Trust, also reported an outflow on Wednesday. Its holdings fell nearly 40,000 ounces or 0.1 percent.
"Speculator interest is slowly easing, while physical demand concerns are as ever present at record high prices," said VTB Capital analyst Andrey Kryuchenkov in a note. Among other precious metals, silver was bid at $17.34 an ounce against $17.66 late on Wednesday, tracking losses in gold. Platinum was at $1,353 an ounce against $1,359.
The world's biggest platinum producer, Anglo Platinum, said its third-quarter production of refined platinum fell 9.9 percent from last year. Lonmin, the world's third-largest platinum miner, said metal output fell 6 percent in the year to September. Chief Executive Ian Farmer was positive on prices.
Palladium was flat at $332.50, supported by fears over the outlook for Russian and South African supply and hopes for a recovery in automotive demand. Platinum and palladium are mainly used in autocatalysts. Investment demand is also strong. ETF Securities said holdings of its London palladium exchange-traded commodity rose nearly 9,000 ounces on Wednesday to record highs.