Gold fell more than one percent on Wednesday as a dollar bounce on US growth data pulled prices further from the previous day's near six-week peak, although softer equities markets kept bullion underpinned. The US dollar rose 0.4 percent against the euro after data showing US economic growth slowed less than previously estimated in the fourth quarter.
Spot gold lost 1.4 percent at $1,325.66 per ounce by 1:34 p.m. EST (17:34 GMT), while US April gold futures settled down $17.80, or 1.3 percent, at $1,324.20 an ounce. "Despite the fact that the equity markets are near a cliff, we have not seen much interest amidst retail investors for gold and the strength of the dollar index is also weighing on the price," Think Markets chief market analyst Naeem Aslam said.
"However, given the geopolitical uncertainties we have, we do think that the path of least resistance is skewed to the upside." Gold is set to close the first quarter up 2 percent. Bullion has traded in a tight range between $1,300 and $1,360 this year. "Yesterday's action failed again at $1,360 and without a recovery early in the day, some speculators are trading the range and taking some profits," said Rob Haworth, senior investment strategist for US Bank Wealth Management.
Stocks softened as persistent jitters about a US-China trade war and the prospect of a regulatory crackdown on companies such as Facebook left investors facing their first quarterly drop in stocks in two years. United States precious metals markets will be closed on Friday for the Good Friday holiday.
Meanwhile, silver lost 1.4 percent at $16.26 an ounce, seeing a one-week low of $16.24. Platinum dropped 1 percent at $934 an ounce, after touching $930.50, its lowest since Jan. 2. Palladium decreased 0.7 percent at $966 an ounce, earlier hitting $961.65, a three-week low. The autocatalyst metal is on track to end March down 6.6 percent, its biggest monthly loss since December 2016.
Nonetheless, palladium's underlying supply and demand picture suggests prices will remain supported, UBS said in a note, after the metal hit a record high in January. "Palladium forwards remain firmly in backwardation, strong trade inflows into Hong Kong continue to be evident, and our factor-analysis suggests that the influence of fundamental factors on price action has increased over the past year," it said. Backwardation is when a futures contract trades below the asset's expected price at the contract's maturity and is often seen as a sign of market tightness.