GOLD came under pressure from profit-taking and fund selling, to close below $US900 an ounce despite a markedly weaker US dollar.
April gold fell $US14.70 to settle at $US892.50 an ounce after putting in an intraday low of $US890.30 on the Comex division of the New York Mercantile Exchange.
"We're seeing a bit of consolidation and profit-taking right now," said Ralph Preston, senior market analyst with Heritage West Financial.
"I reckon we're going to pull back and test the $US875 area."
KEY COMMODITY PRICES: oil, base metals, gold, livestock and wheat
George Gero, vice president with RBC Capital Markets Global Futures, said that gold now has $US875 support and $US925 resistance. Sell stops were hit as the metal entered the $US900 area, Mr Gero added.
"We moved a lot in a very short amount of time and the market's going to have to consolidate those gains," said Frank Lesh, broker and futures analyst with FuturePath Trading.
April gold gained nearly $US120 from its close on January 15 to the January 30 close.
"You take your money off and wait for the dip to come back in," Mr Lesh said. "It's definitely longs coming out of the market."
Earlier in the trading session, gold was finding support on safe-haven buying and a falling US dollar, but the profit-taking ended up outweighing support from the currency's decline.
Shortly after gold closed, the ICE Futures US dollar index was down more than 0.77 per cent. Dollar-denominated gold is seen as an inflation and US dollar hedge, and often trades inversely with the greenback.
Even when the metal was higher, the rally was being held in check by institutional selling on profit-taking and "some trepidation" about gold not being able to push higher than it had after breaching $US900, said Jim Steel, senior vice president and metals analyst with HSBC.
Meanwhile, platinum and palladium futures were weighed down by declines in gold prices and bearish auto sales.
Nymex April platinum lost $US15.60 to settle at $US963.50 an ounce, while March palladium on the exchange declined $US5.50 to settle at $US192.95 an ounce.
Toyota Motor and Ford Motor recorded bigger-than-expected declines in US light-vehicle sales last month, which is shaping up as among the worst in decades.
"With people selling off the highs (in gold), that added some momentum to platinum and palladium coming down," a trader said.
