GOLD AND PLATINUM DECLINE

GOLD RETREATED yesterday, hit by a bout of technical selling after it failed to hold above the key $1 800 (about R26 608) level as investors looked past a subdued dollar and sought clarity on the US Federal Reserve's tapering strategy.

Spot gold price fell 0.6 percent to $1 793.81 an ounce by 5.13pm, while US gold futures dropped 0.6 percent to $1 796 an ounce.

But spot prices traded within a tight range, reflecting overall uncertainty over the path the Fed may adopt at its meeting next week after softer US inflation data on Tuesday.

A stronger-than-expected Fed's manufacturing report for September earlier in the day fell “into the camp of the monetary policy hawks, which put a little pressure on the gold market”, said Jim Wyckoff, senior analyst at Kitco Metals.

He added that improved risk sentiment was also weighing on bullion and that trading was likely to be choppy ahead of the Fed meeting.

Wall Street's main indices were higher yesterday, with sectors such as energy and financials recovering some recent losses.

The yellow metal, however, got some support from a 0.1 percent fall in the dollar index.

While US bond yields retraced from recent highs, “it has not been enough to attract the renewed demand for gold”, Saxo Bank analyst Ole Hansen said.

“However, risk to the downside for gold is also limited since the slowdown in inflation thereby reduces the pace with which tapering can be carried out,” Hansen said.

Platinum hit a more than ninemonth low of $925.50 an ounce and was last down 0.3 percent at $936.28 an ounce.

Palladium gained 1.9 percent to $2 016.08, after falling to a more than one-year low on Tuesday.

Silver was down 0.3 percent at $23.77 an ounce.