The precious metals slipped lower Wednesday in line with wider markets as month/quarter-end book squaring together with the absence of fresh risk appetite prompted players to par their positions. The complex closed near the day’s lows, settling down a net 1.5% after gold failed to conquer resistance around $1700 while the industrial precious metals struggled under negative technical outlooks as platinum failed to break above trend-line resistance around $1664 while palladium dipped to its lowest in 10-weeks touching $643.

Equities struggled across the day with the FTSE settling down 1% after the final GDP reading showed the UK economy contracted more than forecast; US indices finished slight better with the Dow and S&P500 off 0.5% however Durable Goods data failed to entice any sizeable risk appetite. Currency sentiment proved broadly mixed across the day with the Dollar Index trading between -0.3% and +0.3%; the euro lost ground during European trade in the run up to the ECOFin meeting Friday/Saturday where officials are set to vote on increasing the capacity of the Eurozone bailout fund to €700bn.

Equity weakness has spilled over into Asian markets overnight despite data showing improved Japanese Retail Sales – up from 1.8% to 3.5% - and New Zealand Business Confidence which rose from 28.0 to 33.8; at the time of writing the Nikkei was trading down 0.6% and the MSCI Asia Pacific Index 1.2%. In the currencies the US dollar was trading broadly lower this morning with the Aussie dollar under similar pressure amid concerns China’s economy faces a hard landing; the DXY was off 0.4% at the time of writing, AUD/USD was down as much as 0.5% although has since recovered ground, the yen was up 0.5% against the euro.

Economic data today includes German Unemployment Change, US Jobless Change and final GDP reading. In addition MPC member Fisher and FOMC member Lockhart are due to speak, as is Fed Chairman Bernanke and again players will on the lookout for hints or further suggestions of QE3/Fed monetary policy.

The precious metals, with the exception of palladium, have seen a steady start with gold and platinum currently up around 0.1% while silver is off a similar amount. Palladium has succumbed to further pressure though amid concerns China’s economy faces a hard landing, which will have a knock-on effect on the gasoline dominant auto market. The metal has dipped to a fresh 10-week low of $639 overnight but while ETF hold edged up 16Kozs yesterday the metal faces the threat of a deeper correction with a breach of $631 signalling a test of $609. Gold is also showing some downside vulnerability with a breach of trend support at $1646 signalling an initial test of the $1620-26 area.

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