Gold came under pressure again yesterday, dropping close to a 12-year low, as selling from producers and speculators returned to the market.
After bouncing on Tuesday afternoon to fix at US$320.80 an ounce in London, gold fell more than $5 to $315.75 an ounce in yesterday's morning fix, recovering to $317.20 in the afternoon fix.
Dealers said Tuesday's rebound in price was natural after the flood of selling on Monday.
Speculators who had sold forward on the belief that prices would drop bought the metal to take profits.
However, the same speculators were then just as keen to go short again on the assumption that prices would resume their decline, dealer said.
'The speculator selling was evident in New York and [East Asia] before Europe opened. The sentiment is still very negative,' one analyst said.
The strong and steady US dollar and weaker platinum and palladium markets were adding to gold's woes, dealers said.
