The gold price retreated below last week's finish Thursday morning in London, heading for its second monthly fall in succession against all major currencies bar the Japanese yen.
Italian and Spanish debt prices fell amid fresh bond sales and a national strike respectively, while Frankfurt's stock market fell for the seventh session in nine.
Crude oil slipped to a one-week low after French prime minister Francois Fillon followed yesterday's news of a sharp rise in US stockpiles by saying the prospects "are good" for a joint EU-US release of strategic reserves.
Down 2.0% in February, the gold price in US dollars was trading at $1,657 per ounce by lunchtime today – some 7.0% below the start of March.
Gold hasn't fallen for more than two months in succession since spring 2001 vs. the dollar, autumn 2006 vs. sterling, and mid-2007 vs. the euro.
"The view that the US economic recovery is looking more sustainable is becoming increasingly accepted," wrote UBS analysts Edel Tully and Julien Garran in a new report on Wednesday, slashing the Swiss banks's 2012 average gold price target by 18% to $1680.
"Gold is at risk, for it needs persistent inflows of investor money to keep it on its upward trajectory."
"Investors need to put in well over $100 billion to the gold market in 2012 to keep prices high," said GFMS chairman Philip Klapwijk at a CME conference in Singapore today, quoted by Reuters.
Globally, gold investment demand rose 33% by dollar value to $83bn in 2011, according to GFMS data.
Klapwijk forecasts a "short-term" drop in the gold price below $1,600 per ounce.
New data today showed Russia selling down its gold bullion reserves for the first time in five years last month.
Slipping by 3.8 tonnes, Russia's gold reserves have doubled by weight since 2007 to 883 tonnes, and quadrupled as a proportion of its total foreign exchange reserves by value to 9.8%.
Figures from Data Explorers, quoted by CityWire, say that hedge funds and other investors have sharply increased their short sales of gold mining stocks, with 10% of Chinese miner Zijin Mining Group currently out on loan.
"Indian [gold] demand has been dead for three months," said a senior Swiss logistics executive to BullionVault on Thursday, as the strike by India's jewelry retailers protesting a hike in import duties to 4% by value entered its 14th day .
"Nothing's moving, everyone's waiting."
Jewelry demand in India – the world's #1 consumer market – "was reasonably positive" in the first two months of 2012, according to GFMS's Klapwijk, but the hike in India's gold import duties is denting sales.
"If the excise duty is corrected, the trade will be happy," MarketWatch quotes Bhargav Vaidya of the Bombay Bullion Association.
"The strike will not be indefinite, and customers will not go high and dry during [the key gold buying] wedding season."
Meantime in the UK – which the OECD today said has fallen back into recession – daily petrol sales jumped 81% and diesel sales by 43% on Wednesday, according to the Petrol Retailers Association, blaming Government minister Francis Maude for the "panic buying" by advising motorists to fill jerry cans ahead of a possible strike by tanker drivers next week.
More broadly, and with crude oil prices near all-time records in sterling and euros today, "It is the perceived potential shortage of oil keeping prices high – not the reality on the ground," says Saudi oil minister Ali al-Naimi writing in the FT today.
"There is no lack of supply. There is no demand which cannot be met."
"Used to be that Saudi Arabia produced more oil when it wanted lower oil prices," notes Olivier Jakob at Petromatrix. "Today, when Saudi Arabia wants lower prices it produces an op-ed in the Financial Times.
"It shows that you either do not want or can't produce more."
Also in the UK today, Bank of China Ltd applied for membership of the London Metal Exchange, the world's #1 base metals exchange.
BoC's UK commodities arm is the first Chinese-owned business to apply for membership. Barclays Capital reckons that China now buys some 40% of annual global demand for copper, aluminum and nickel.
In the last 3 months of 2011, Chinese households overtook Indian consumers as the world's top buyers of physical gold according to GFMS data, despite the gold price recording its second-ever highest quarterly average against the Yuan.