"Gold continues to show little independent spirit and is largely trading in harmony with equity markets and commodities," said Commerzbank, noting the metal's failure to close above its key 200-day moving average at $1,620/oz Wednesday.
The bank also noted a "considerable" reduction in gold exchange-traded fund holdings for the second time in a week, a sign that "some ETF investors are also beginning to feel that gold is initially taking a break from its upward trend," it said.
The world's largest gold ETF, SPDR Gold Trust, saw outflows of around 12 metric tons Wednesday, noted Commerzbank.
Gold trade is likely to be rangebound and choppy as the week draws to a close and market players take to the sidelines for the Christmas break, said analysts and traders.
However, support at $1,560/oz should limit gold's downside, although any gains will likely stall below short-term resistance at $1,620/oz, they said.
Further ahead, gold and silver prices may come under pressure in the new year ahead of January's annual rebalancing of commodity indices, said HSBC analyst James Steel.
January's rebalancing--a process in which indices sell the previous year's outperformers and buy the underperformers--coincides with the roll schedule for gold and silver futures, in which futures that are about to expire are sold and futures further out in the year are bought. This combination could see downward pressure exerted on prices ahead of the rebalancing date if lower target weights for 2012 are signaled, he said.
Elsewhere in the precious metal complex, spot platinum was 0.2% lower at $1,421/oz and spot palladium was down 0.8% at $626.50/oz. For the latest updates on the stock market, visit Stock Market Today
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