LONDON—The spot price of gold fell, with analysts suggesting the possibility of a further pullback in the short term following the metal's recent rebound.
Standard Bank said the extremely strong demand seen from China and India is now easing, pointing to the likelihood of further price falls in February--with tests of $1,300 a troy ounce a possibility.
VTB Capital also suggested this week's rebound is "running out of steam" and said there is an increasing chance of a small pullback as interest subsides.
Spot gold has rallied about 4% higher since the end of January, when it was trading at four-month lows. It recently traded down $7.20, or 0.5%, at $1,356.60 an ounce.
Nevertheless the market is expected to be relatively quiet heading into the weekend, as investors await the return of all Chinese participants following extended Lunar New Year holidays, a trader said.
While uncertainty over the short term direction of the market is capping gains, he said the metal has so far been well-supported at current levels, with dips under $1,360/oz finding buying support.
Spot silver was down 38 cents, or 1.3%, at $29.82 an ounce. Spot platinum was down $23, or 1.2%, at $1,832 an ounce, and spot palladium was down $11, or 1.3%, at $816 an ounce.
