Gold is proving once again it is one of the most enigmatic of commodities. So far this month, the yellow metal hardly budged while palladium rushed to 17-year highs and leasing rates for platinum group metals (PGMs) averaged more than 100 per cent. This week, PGMs have been much more subdued but gold suddenly began falling. Traders are calling the move another response to growing disillusionment with gold. They warn it may now be punished for failing to capitalise on the rise in demand for PGMs and last week's outbreak of intense wrangling over the shape and timing of the European Economic and Monetary Union (EMU). Analysts say they are perplexed by gold's failure to react to the German government's climbdown last week from its proposal to revalue its gold reserves this year. The proceeds would have been used to help it meet EMU criteria. Talks on the issue between Bonn and the Bundesbank are continuing. 'I'm as surprised as you are that we have not seen any big moves,' Union Bank of Switzerland's precious metals analyst Andy Smith said. The commodity also failed to move on political news. 'Europe has turned to the left, to a reflationary phase . . . and it should have gone up by $10 even if it was just for a day,' he added in reference to the French Socialist Party's election victory last week. Some traders indicate that there is already evidence of 'reasonable and consistent selling' in the market, in response to gold's apparent indifference to world events. Suspected selling from Australian producers has begun to feed through, pushing the lease rates for one-month metal lower. Heavy bullion selling in Asia was reported on Thursday. Some say this started last week, and effectively counterbalanced the expected follow through from the rally in PGMs. This is dismissed by others, who believe gold buying would have overwhelmed any selling pressures. Dealers say gold is in a transitory phase, where the asset's value as a long-term holding is being questioned. Mr Smith said the yellow metal is in a world of its own most of the time. 'You certainly won't get the types of squeeze that you are seeing in PGMs . . . there's 17 years of supply above ground,' he said. 'To take the extreme, if the South African mines did go on strike, people are likely to say 'So what?' ' Analysts said until a more definite assessment could be made of gold's investment attraction, its movements would remain unpredictable. 'I kept telling you what a dog it is, but you wouldn't believe me,' a dealer said. 'Nobody wants it, there's always a producer selling, and it's losing interest everywhere.'