The price of gold was down $3.81/oz by Wednesday afternoon as the dollar showed steady strength throughout trade on Wednesday.

At 3.30pm US GDP figures were released showing that the economy had grown by a revised 2.2 percent in the third quarter, compared to the 1.6 percent figure released previously. The market had expected growth of about 1.8 percent.

By 4.02pm, spot gold was quoted at $635.89 a troy ounce from an overnight close of $639.70/oz.

The euro was bid at $1.3151 from $1.3193 late on Tuesday.

Matthew Turner, analyst at Virtual Metals in London, says that gold will continue to track the dollar in the short-term and points out that some market watchers say this correlation will continue for the next year.

New home sales data out of the US was still expected at 5pm SA time.

In a report by National Australia Bank economist, Gerard Burg, on Wednesday, which forecast an average gold price of $675/oz in 2007, up from his 2006 forecast of $606/oz.

The reasons behind the bullish forecast included US interest rate cuts and increasing jewellery demand for the yellow metal.

Turner says Virtual Metals is seeing signs of a platinum market in balance after years of deficit. The price has come down dramatically after last weeks’ dramatic rise to record highs of $1400/oz.

Platinum was flat at $1155/oz, while palladium was quoted at $319.50/oz, down $2.50 from its overnight close.