LONDON: Gold fell on Wednesday, as the dollar and equities staged a rebound after a slow start to the day and investors remained cautious ahead of minutes of the U.S. Federal Reserve's April policy meeting, due later in the day.
Palladium touched a near three-year high and platinum rose near a two-month high, as labour strikes in top producer South Africa dragged on for a 17th week and after an industry report said a shortage of both metals was set to widen this year.
"We don't have much supply coming in ... while the prospects for car sales are improving and investment is strong," ABN Amro analyst Georgette Boele said.
"But should the strikes end, although you will still have losses in the ramp-up phase, the impact on PGMs (platinum group metals) prices could be negative."
Spot gold was down 0.3 percent at $1,290.30 an ounce by 1429 GMT, while U.S. gold futures fell 0.4 percent to $1,290.10 an ounce.
Platinum rose 1.1 percent to $1,476.00 an ounce, not far from a two-month high of $1,483.50 hit last week, while palladium was up 0.5 percent at $829.20 an ounce, having touched its highest level since August 2011 at $830.40 in earlier trade.
Global shares picked up on Wednesday, while the dollar bounced back 0.2 percent against a basket of currencies after starting the session lower.
A stronger dollar makes gold more expensive for foreign investors, who showed little interest towards the metal in the absence of major economic events.
"For the past few weeks, gold has been struggling for direction," Mitsubishi Corp analyst Jonathan Butler said.
"We have seen occasional spikes when some news out of Russia has happened, but this geopolitical risk factor is already in the price to a large degree, and in the absence of that and any other macroeconomic news, investors are just lacking conviction."
As a gauge of investor interest, holdings of the SPDR Gold Trust, the top gold-backed exchange-traded fund, fell by 1.79 tonnes on Tuesday.
Investors were also keeping an eye on the Fed's April policy meeting minutes due later in the day. While the central bank is not expected to raise rates until at least the middle of next year, market players will be keen to learn whether officials discussed the myriad issues about policy normalisation.
On the physical side, India's finance ministry and central bank officials will recommend the new government relax strict gold import rules to head off a surge in illegal buying in the world's second-largest consumer of the metal.
In news from the platinum group metals, refiner Johnson Matthey said on Tuesday that the platinum market was expected to post a deficit of 1.218 million ounces this year, the largest shortfall since it began compiling data in 1975.
South Africa, currently facing its longest and costliest platinum miners' strike ever, is expected to supply a quarter of a million fewer ounces of metal in 2014 than last year. Platinum is mainly used to make emissions-capping catalytic converters in automobiles.
The world's top platinum producers and the AMCU union agreed on Tuesday to court-mediated wage talks to end the strikes, which have cut global production by about 40 percent.
Spot silver fell 0.3 percent to $19.37 an ounce.
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