Gold held near its lowest level in four weeks today, losing some of its safe-haven appeal after the dollar shrugged off a tame US inflation reading and strengthened in New York.

Silver hovered not far from Friday’s three-week low, platinum dropped to its lowest level since November 2, while palladium fell to its lowest in nearly two weeks.

Spot gold hit a low of $614,90 an ounce, not far from Friday’s low of $614,20, before rebounding to $617,10/617,85 in early trade on the back of scattered buying from jewellery makers.

The metal was last quoted at $615,00/616,50 late in the US market on Friday, and off a 16-week high of $649,50 hit in early December.

Benchmark gold futures on the Tokyo Commodity Exchange fell 32 yen per gram to 2,367 yen after losses in New York’s Comex market, further dampening sentiment in the cash market.

"Private investors have lost the intention to buy more gold," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo. He pegged key support around $610 an ounce - a level last seen in late November.

Dealers said gold’s lacklustre performance worried investors, especially those in Japan, where platinum buyers also sold back the metal. Platinum hit a low of $1,093 an ounce, its lowest in nearly seven weeks, down from $1,104/1,112 an ounce late in New York.

Rumours about the launch of an exchange-traded fund propelled platinum to a record high of $1,395 an ounce in late November. The ETF allows investors to trade the commodity on an exchange without buying futures.

Japanese investors and global investment funds have bought precious metals as an alternative to a fragile dollar. The dollar was little changed ahead of a Bank of Japan policy meeting and comments from BOJ governor Toshihiko Fukui to see whether he will signal a rate rise as soon as January.

The dollar traded at 118,05 yen, barely changed from 118,18 yen late on Friday.

The euro was at $1,3085 against the dollar, little changed from Friday when the US currency ignored a benign inflation report and rose as traders continued to take profits on the single currency’s recent rally.

Investors also await US current account data for the third quarter due in the afternoon, with dealers expecting the deficit to rise to $225,0bn from $218,4bn in the previous quarter. Silver edged up to $12,89/12,94 an ounce from $12,85/12,92 an ounce in New York on Friday, when it tumbled to its lowest since November 21 at $12,77.

"I think it’s hard for silver to regain $13 for the time being because the longs are still in the market. But I think this is only a correction. It’s not going to go down much lower," said a dealer in Hong Kong.

"Physical buyers will try to buy gold at the current level, but psychologically, they will also wait for more declines since gold has dropped dramatically last week," he said.

Palladium eased to $323/328 an ounce from $326/329. It had fallen to as low as $320 in early trade.