Gold extended gains made in New York and rose around $1 in Asia on Thursday, but trading was slow because of a lack of physical demand, dealers said.
Spot gold was at $394.05/394.75 an ounce, up from $393.00/393.75 in New York on Wednesday, when it also gained around $1 after the US currency fell following a long anticipated interest rate hike announced by the Federal Reserve.
Some dealers said even though gold was now trading below the psychologically important $400 mark, investors were hoping to buy the metal at much cheaper prices. Gold has fallen 2.6 percent since touching a 10-week high of $404.60 on Monday.
"Physical demand is slow," said Beth His Wash, a dealer at United Overseas Bank in Singapore, hoping that gold prices would soon soften to attract fresh buying.
"We offer all the recycled (gold) bar. Some people sold us the bar when the price was high, so we just sell it at a cheaper premium to other customers," she said. Dealers said the currency market was likely to guide gold, with players closely watching movements of the dollar against other currencies.
The dollar was at 1.2164 against the euro, compared with around $1.2190 in late US trade.
In Tokyo gold futures, benchmark June 2005 lost 5 yen per gram to 1,370 yen because of a stronger yen, which encouraged profit taking.
The dollar was trading at 107.95 yen, versus around 108.80 in New York trade. A Bank of Japan survey showing Japanese business sentiment was at its highest level in 13 years boosted the yen.
Platinum was at $782/787 an ounce, down from $785/790 in New York.
Sister metal palladium was at $214/219 an ounce, up a touch from $212/217. Silver was at $5.83/5.86 an ounce compared with $5.81/5.84 late US trade.
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