SINGAPORE Gold fell for a third day yesterday as investors switched to equities after the United States Federal Reserve vowed to keep interest rates low until 2014, while platinum prices held at premiums to bullion on lingering worries about supply disruption.
Investors also ditched gold in favour of the dollar after Fed Chairman Ben Bernanke offered no clues on whether there would be another round of monetary easing, which would offer support to bullion as a safe haven.
Gold hit an intraday high at $1 681,95 before slipping to $1 671,19 an ounce down $3,56. On Tuesday, it hit a low of $1 661,99, its weakest since late January.
Bullion rose to a record of around $1 920 in September on fears the euro debt crisis could stall global growth.
Gold is just caught in a downdraft again after Bernanke didnt really talk about quantitative easing.
But there is still this deep-seated theme of central bank buying and strong retail demand from emerging Asia, particularly China, said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
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The bottom of the market is about $1 650 at the moment, but we wont rule out another stab at resistance at $1 700.
Quantitative easing, or major asset purchases by the Fed, keeps interest rates and borrowing costs low, which in theory makes gold more attractive compared with yield- or dividend-bearing assets such as bonds or stocks.
Platinum rose $4,31 an ounce to $1 685,74 an ounce, having hit an intraday high $1 701,50.
Platinum gained on worries about supply following a month-long stoppage at the worlds second-largest producer Impala Platinums largest facility, which the company said cost nearly 200 000 ounces in production and would probably cut deliveries in April by as much as 50%.
US April gold extended losses, falling more than 1% to $1 671,90 an ounce after upbeat US economic data boosted investors risk appetite.