London: Gold fell for a second day as some investors sold the metal to lock in gains from its rally to a six-month high. Silver and platinum also declined.
Gold closed at $927.85 (Dh3,405) an ounce on January 30 - the highest since July 28 - and traded as high as $928.45. The metal advanced 5.2 per cent in January, rising for a third month and driving investment in exchange-traded funds backed by bullion, such as the SPDR Gold Trust, to a record.
"The market has got too long on ETFs," Bernard Sin, currency and metals trading chief at Swiss refiner MKS Finance SA, said by phone from Geneva. "That's the reason we're seeing profit-taking. The market may be expecting a correction."
Bullion for immediate delivery lost as much as $10.17, or 1.1 per cent, to $895.33 an ounce and traded at $902.70 at 10:45am in London.
April futures declined $3.20, or 0.4 per cent, to $904 in electronic trading on the Comex division of the New York Mercantile Exchange.
The metal declined to $902 in the morning "fixing" in London, used by some mining companies to sell production, from $918.25 at yesterday's afternoon fixing.
Holdings in the SPDR Gold Trust, the largest ETF backed by the metal, climbed 1.2 per cent to a record 853.37 metric tons.
Bullion held in Zuercher Kantonalbank's ETF also reached an all-time high, rising to 3.54 million ounces (110 tonnes).
"Rapidly growing ETF holdings are a clear sign of safe haven buying of gold," UBS AG analyst John Reade said in a note. "This is the dominant factor in the gold market."
European producer-price inflation eased to the slowest in 16 months in December, while retail sales in Germany, the euro area's largest economy, unexpectedly dropped for a third month in December, reports showed yesterday.
Among other metals for immediate delivery in London, silver fell 0.4 per cent to $12.38 an ounce.
Platinum lost $4, or 0.4 per cent, to $968 an ounce, and palladium was 0.3 per cent higher at $196.50 an ounce.
