Gold dipped on Thursday after the European Central Bank confirmed its existing stimulus programme but refrained from extending it as some market players had hoped. Shares also fell on disappointment that ECB chief Mario Draghi said the bank had not even discussed an extension of quantitative easing. "People's expectations were again too high ahead of this decision and they have been caught offside," said Craig Erlam, an analyst with online broker Oanda.
Spot gold fell 0.1 percent to $1,344.25 an ounce by 1432 GMT, with US gold futures also down 0.1 percent at $1,348.20. The moves in gold were narrow, with bullion still gaining support on the downside from a weaker dollar on views that the US central bank is in no hurry to raise interest rates. Gold held most of its strong gains from Friday, when weak US jobs data led investors to bet that a September rate rise was no longer on the cards, sending the dollar spiralling down.
"We had another couple of data points this week in the US that pointed perhaps to the economy not yet being strong enough to sustain another interest rate rise in the short term," said Mitsubishi analyst Jonathan Butler. "With a week or so to go before the (Federal Reserve) meeting, I think generally we'll see a supportive environment for gold, but also quite a bit of choppy trading as sentiment changes."
The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 94.831, paring its losses. A weaker dollar makes gold less expensive for holders of other currencies. Spot gold faces resistance at $1,352 an ounce and could either hover below this level or retrace to support at $1,327, Reuters technical analyst Wang Tao said.
Platinum rose 0.3 percent to $1,088.20 an ounce, having hit a two-week peak on Wednesday. In its latest Platinum Quarterly report, the World Platinum Investment Council forecast a 520,000-ounce deficit in the platinum market this year, up from a 455,000-ounce shortfall predicted three months previously. Strategist Joni Teves at UBS was wary about any gains in platinum based on a possible strike by miners in top producer South Africa.
"Unless there are material signs of market tightness, we think any significant upside move in platinum on the back of industry action should ultimately be faded," she said in a note. Palladium was up 0.2 percent at $688.40. On Wednesday the metal scaled its highest in more than two weeks. Spot silver shed 0.2 percent to $19.73, having touched its highest in more than three weeks in the previous session.