Gold rebounded from the previous session's nine-month lows on Wednesday as the dollar index pulled back from early highs in the wake of US jobs data, taking pressure off precious metals. Strength in the US currency on expectations the Federal Reserve is set to tighten monetary policy before other major central banks helped knock gold down 9 percent in the third quarter, and earlier sent platinum prices to a five-year low.
Spot gold had recovered to $1,215.95 an ounce at 1358 GMT, up 0.6 percent, after earlier slipping to within 10 cents of the previous day's nine-month low at $1,204.40. US December gold futures were up $4.90 an ounce at $1,216.50. "We've seen the ADP numbers coming in a litle bit less than hoped, and that has helped give gold some support today. The dollar has dropped back slightly on the back of that," Mitsubishi analyst Jonathan Butler said.
Reflecting waning investor sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 2.39 tonnes on Tuesday to 769.86 tonnes, the lowest since December 2008. Markets in top bullion buyer China are closed for a week from Wednesday for the National Day holiday, weakening support for gold during Asian trading hours and potentially accelerating a fall below $1,200. Investors were also watching the political unrest in Hong Kong for its impact on equities and safe-haven bids for gold.
Silver was up 2.1 percent at $17.26 an ounce, while spot palladium was down 0.1 percent at $769.60 an ounce. Spot platinum was down 1.3 percent at $1,277.99 an ounce, having earlier slid to its lowest since September 2009 at $1,256.30. It tumbled 12.7 percent in the last quarter, taking little support from a five-month strike in major producer South Africa earlier this year. "Our analysis of above-ground platinum and palladium inventory published in June last year indicates that this inventory is indeed high," Standard Bank said in a note on Wednesday. "While some of this inventory would have reduced due to the large deficits anticipated this year, levels remain high. As a result, on balance, the bias may lie towards having to wait longer before PGM prices move higher on a sustainable basis."