Gold came under pressure in Asian afternoon trade on Thursday due to profit-taking, extending losses on the Comex market, after buoyant US economic data helped to lift the US dollar, bullion dealers said.
The data, which pointed to the smallest trade deficit in 13 months and showed no signs of inflation, prompted investment funds to liquidate long positions in precious metals, knocking off some gains in silver, platinum and palladium.
Spot gold stood at $418.50/9.25 an ounce against New York's last quoted level of $421.40/2.15 and London's on Wednesday afternoon fix of $419.50.
"We might see gold coming down to $417 to $418 today," Commonwealth Bank of Australia commodities specialist David Thurtell said.
The euro was at $1.2650/55, compared with $1.2645 late on Wednesday in New York. The dollar was steady against the yen, hovering around 106.18 yen.
"Some faith has been restored in the dollar after the strong US macroeconomic data," said another bullion dealer.
"We could see some more profit-taking in gold." Spot silver, which has benefited from gold's upward rally and gains in base metals, was down at $6.37/6.39 an ounce from New York's last trade of $6.40/42.
It had hit $6.72 an ounce on Monday, the metal's best price since April 1998. Economic expansion increases demand for industrial silver for electronic and photography purposes.
The Tokyo gold futures tracked Comex, which saw sharp falls in prices. The benchmark December 2004 gold contract on the Tokyo Commodity Exchange fell 19 yen per gram to 1,428 yen.
Palladium was quoted at $211.00/216.00 against New York's last level of $214.50/220.50.
Platinum stood at $852.00/857.00 an ounce versus $860.00/865.00 last quoted in New York.
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