A good day for the dollar took another chunk out of the gold price.
Spot gold tumbled US$25.51 to US$1,432.26 as the US currency made gains against a raft of rivals.
The US dollar index, a basket of six major world currencies weighted against the US currency, hit a two-week high overnight.
Gold traditionally moves the opposite way to the dollar.
Reports the US Federal Reserve may soon curb its current quantitative easing programme added to gold’s unease as it followed better than expected new dole claimant data.
The news overshadowed reports that there was an increase in the amount of gold held in exchange traded funds (ETFs) for the first time in five weeks yesterday.
Physical demand also remains strong, and Investec this morning noted that the seasonally stronger period for jewellery demand is approaching.
Indian imports in April exceeded 100t and are expected to exceed this level in May, said the broker.
“If ETF holdings start to turn, and with strong demand likely to continue from Asia in the months ahead could well be supportive for gold in the months ahead,” it said.
Platinum also fell, despite Anglo American scaling back its heavy retrenchment in South Africa after talks with the government.
The number of planned job losses at its Amplats arm in South Africa has reduced to 6,000 from the 14,000 planned originally. The mining giant said the revised plan would also see the Khuseleka 1 shaft staying open instead of going into care and maintenance as previously planned.
Three other Amplats operations at Rustenburg in South Africa - Khuseleka 2 and the Khomanani 1 and 2 mines - will still be consolidated into surrounding mines.
This will reduce production capacity by approximately 250,000 ounces per annum in 2013 and by an additional approximately 100,000 ounces per annum over the medium term.
Amplats’ originally plan would have seen production from reduced by 400,000 oz per year. Anglo added it remains committed to cutting costs by R3.8 billion (£270 mln) by 2015.
Chris Griffith, Anglo American Platinum's chief executive, said: "These revised proposals reflect our commitment to South Africa and our role in addressing the socio-economic challenges facing the country, while recognising that we need to take actions to return the company to profitability.
Platinum shed US$20 to US$1,482, while silver tumbled US$0.475 to 23.24.
