Gold eased on Wednesday after a successful Portuguese bond auction soothed some concern over the eurozone's finances and removed some investor desire for safe-haven assets, though a softer dollar stemmed the slide. Spot gold was bid at $1,378.72 an ounce at 1610 GMT against $1,380.45 late in New York on Tuesday, having earlier risen as high as $1,386.90. US gold futures for February delivery eased $5.80 an ounce to $1,378.50.
The metal has clawed back some lost ground after posting its biggest weekly loss since mid-2010 last week, as a focus on more positive US data raised the prospect that US authorities may curtail quantitative easing measures sooner rather than later. However, in the absence of further bad news on eurozone sovereign debt and US growth, it may struggle to build on last year's stellar performance, analysts said.
"Gold is being held because of uncertainty, and more than anything because of the fear factor that has been evident since the financial crisis," said Credit Agricole analyst Robin Bhar. Gold buying in top consumer India eased on Wednesday as prices rose, but buying remains strong overall across Asia, particularly in China. Premiums for gold bars hit their highest in two years on Tuesday.
Demand for gold to back exchange-traded funds eased off further, meanwhile, with holdings of the largest, New York's SPDR Gold Trust, slipping just over 1 tonne on Tuesday. Its holdings have declined more than 9 tonnes since the start of the year. Holdings of the largest silver ETF, the iShares Silver Trust , also declined, to 10,725.73 tonnes on Tuesday from 10,786.51 tonnes. Silver was bid at $29.54 an ounce against $29.50. Platinum was at $1,792.00 an ounce against $1,765.99, while palladium was at $799.97 against $782.
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