Gold struck a one-week low today, as speculators ditched some holdings following a sharp drop in oil prices and a rally in the US dollar, which reduced bullion's appeal as an alternative investment.
A state of emergency in Thailand, Asia's fourth-largest gold investor, had yet to spur safe-haven buying but dealers saw purchases at lower levels from jewellers in other parts of Asia. Platinum dropped 3 per cent to a one-week low on demand concerns.
Gold fell to $814.20/815.20 an ounce from $817.15/818.75 an ounce late in London. New York markets were closed yesterday for the Labour Day holiday.
"The movements in oil prices and the US dollar have both conspired against gold," said David Moore, an analyst at Commonwealth Bank of Australia in Sydney.
Oil fell further today after slumping more than $4 a day ago on speculation that a surprisingly weak Hurricane Gustav likely spared key Gulf oil infrastructure.
The dollar index climbed 0.8 per cent to 77.75 after hitting an eight-month high of 77.823.
Gold has lost more than 20 per cent in value since spiking to all-time high of $1,030.80 in March, mainly driven by profit taking, oil's falls from record highs and a rebounding dollar.
"There's a bit of buying on the physical side because the price is below $820 but the situation in Thailand has no impact. Oil is still the main factor," said a dealer in Hong Kong.
Thai prime minister Samak Sundaravej declared a state of emergency in Bangkok and gave the army control of public order after a man died in overnight clashes between pro- and anti-government protesters.
Spot platinum dropped to $1,395.50/1,415.50 an ounce from $1,439.00/1,451.00 late in London on concerns about demand for autocatalysts due to poor car sales and a slowing US economy. Prices were below record high of $2,290 hit in March.
Car sales in Japan, excluding 660cc minivehicles, tumbled 14.9 per cent in August year-on-year to 193,902 vehicles. Sales for August fell short of 200,000 vehicles for the first time in 37 years.
Autocatalysts, used to clean exhaust fumes, account for more than 50 per cent of global platinum demand.
The benchmark platinum contract on the Tokyo Commodity Exchange, August 2009 fell 176 yen per gram to 4,809 yen. New York gold futures lost $16.30 an ounce to $818.90.
Spot palladium fell to $288.00/296.00 an ounce from $297.00/305.00 an ounce. Silver edged down to $13.35/13.41 an ounce from $13.40/13.46 an ounce late in London.