The S&P/ASX 200 index closed 52.7 points lower at 4251.2, while the broader All Ordinaries lost 52.4 points to close at 4319.4.

City Index chief markets analyst Peter Esho told Australian Associated Press energy stocks pulled the market down as it took a breather from recent upward swings.

"Overall the market has recovered over the past two weeks and it's now just a period of consolidating its gains," Esho said.

"All the large key industrial companies that have commenced reporting since the beginning of last week have all broadly met market expectations and I think the market finds comfort in that there's no single problematic area or systemic issue of earnings falling across the economy."

Spot gold continued to gain ground, with investors flocking to the precious metal as concerns of a global economic slowdown escalated.

Morgan Stanley and Deutsche Bank AG cut their forecasts for China’s economic growth, predicting that weaker expansions in the US and Europe would hurt the country’s exports, Bloomberg reported today.

The precious metal was trading at $US1791.80 per ounce in late afternoon trade.

“Gold is benefiting from ongoing concerns about sovereign debt and a world slowdown,” Citigroup head of metal research David Thurtell told Bloomberg.

Newcrest Mining closed A43c lower at $38.66, AngloGold Ashanti was 14c higher at $8.64, Kingsgate Consolidated added 1c to $8.91, while Medusa Mining shed 10c to $7.45.

Major miner BHP Billiton closed 72c lower at $39.10, with the company announcing it required government approval for a proposed railway line in central Queensland.

The rail would run from the Goonyella Riverside mine in the Bowen Basin to a greenfields coal terminal in Abbot Point.

Meanwhile, Rio Tinto has progressively resumed operations at the Brockman 2 and Nammuldi mines in Western Australia today.

The company closed the mines yesterday following a fatality.

Rio shares shed $1.08 to $73.34.

Iron ore miner Fortescue Metals Group was down 19c at $6.05.

Base metals on the London Metal Exchange were mixed during afternoon trade in Singapore.

Copper for three-month delivery was down by 0.41% at $US8928 per tonne, zinc added 0.41% at $2224/t, while nickel added 0.59% to $21,821/t in late afternoon trade.

Finally, the Australian dollar was $US1.04 at 4pm (AEST).