LONDON, April 23: Gold drifted lower on Wednesday tracking as the dollar firmed against the euro, with investors staying on the sidelines as the metal struggled to retain recent gains, analysts said.

Spot gold fell as low as $913.80 an ounce and was quoted at $916.10/917.10 at 1021 GMT, against $920.65/922.05 late in New York on Tuesday.

The metal is under pressure as its failed to respond to higher oil prices and a weaker dollar, said Simon Weeks, managing director of precious metals at Bank of Nova Scotia.

Gold is vulnerable to another major sell-off in the near term, with a drop of about 18 tons in ETF inventories on a day hardly being a good advertisement for the upside.

Gold held in New York-listed StreetTRACKS Gold Shares, the world’s largest gold-backed exchange-traded fund, fell to 623.41 tons on Tuesday from 641.82 tons the previous day.

The metal hit a three-week high of $952.60 last week but attempts to stay above $950 were met by profit-taking. Dealers noted some physical demand but it was not enough to trigger another rally towards last month’s record high of $1,030.80.

In the near term, gold is likely to continue to take its lead from dollar movements, said Suki Cooper, precious metals analyst at Barclays Capital.

Platinum traded in a range of $37 an ounce, falling as low as $2,001 an ounce and hitting an intra-day high of $2,038. It was last quoted at $2,012/2,022, against $2,017.50/2,027.50.

In industry news, Lonmin Plc, the world’s third biggest platinum producer, posted an 8.3 per cent rise in second quarter platinum sales, but again cut its full-year sales target following power problems in South Africa.

Platinum also faced pressure from news that Mitsui Mining and Smelting had developed a new catalyst for diesel engine cars that replaces the use of platinum with silver, a less conventional but much cheaper metal.

Silver edged down to $17.61/17.71 an ounce from $17.64/17.73, while palladium was up 50 cents at $451.50/457.50 an ounce.—Reuters