LONDON, Dec 7: Gold steadied on Thursday after falling to its lowest in two weeks and platinum recovered from a five-week low, but the metals remained vulnerable because of a volatile dollar.
Economic events this week may help to determine the near-term path for gold, with Thursday's European Central Bank (ECB) meeting and jobless claims figures out of the US.
Much depends on oil prices and the dollar. If, for whatever reason, they provide a very strong support then there might not be too much selling,” Wolfgang Wrzesniok-Rossbach, head of precious metals marketing at Germany's Heraeus, said.
The market is going to stay volatile. Until Christmas, I don't think volatility is going to die down. Gold hit a low of $626.70, its lowest since Nov. 22, against $630.60/632.10 an ounce in New York late on Wednesday, when it fell nearly 2 per cent. It was quoted at $630.40/631.90 by 1105 GMT.
The dollar steadied after moving towards a recent 20-month low against the euro, while oil prices rose above $62 a barrel.
Gold often moves in the opposite direction of the dollar and is generally seen as a hedge against inflation.
The thoughts were that we would be looking to test and break through $650 again and probably up towards $675, said Darren Heathcote of Investec Australia.
Given we're sort of below that, I would think investors might be a little bit more cautious. Gold rallied to a 16-week high at $649.50 an ounce last Friday -- just below the stubborn $650 resistance level. In other metals, platinum was quoted at $1,115/1,120 an ounce after falling to a five-week low of $1,094, against $1,120/1,125 in New York.
Platinum, used to make jewellery and clean car exhaust emissions, has lost more than 20 per cent in value since spiking to a record high of $1,395 on Nov. 21.
But analysts remained positive towards the metal.
Underlying supply and demand factors should support platinum, with limited supply and decent Chinese jewellery and industrial interest around, John Reade, head of metals strategy at UBS Investment Bank, wrote in a daily report.
Silver hit a one-week low of $13.42 an ounce, down from $13.57/13.64 in the US market and off Tuesday's six-month high of $14.17.
The metal has been supported by speculative buying from investment funds through silver exchange-traded funds.
Palladium was at $324/329 an ounce, versus $326/329.—Reuters