Gold was pulled two ways as the rising dollar offset another burst of monetary easing, this time by the Chinese government.
Analysts say eventually the wall of cash being thrown at the global economy will translate into a higher gold price, but today the problems of the eurozone and the impact it is having on the US currency held sway.
Spot gold had eased US$0.7 to US$1775 by mid-afternoon, with silver also drifting lower to US$33.985.
European concerns were blamed for the lack of interest. German Chancellor Angela Merkel visited Greece for the first time since the crisis broke today to be met by crowds of demonstrators, which served as a reminder that Europe’s problems are far from over.
Worries over the eurozone overshadowed both the gloomy global economic forecast from the IMF yesterday and an injection of US$ 42 bln by the People’s Bank of China to boost the Chinese economy.
Platinum bucked the weaker trend among precious metals adding US$4 to US$1,693 as the ongoing industrial crisis in South Africa showed no signs of easing.
Xstrata’s Eland is the latest platinum mine to be affected by action, but gold production is also being hit with strikes underway at mines owned by AngloGold Ashanti, Gold Fields and Harmony Gold.
South Africa was the world's fifth-largest gold producer last year.
There was some better news among the small caps as Caledonia Mining Corporation reported the best three month’s performance from its Blanket mine in Zimbabwe since it opened in 1906.
