Gold steadies in Europe

Gold prices were steady in choppy European trade on Thursday after US data sent mixed signals on the economy, but dealers said the market was rangebound. After an initial jump, spot gold was trading mostly unchanged at $432.45/433.20 a troy ounce by 1445 GMT, having tracked currency moves and compared with late New York levels of $432.50/433.00. Although US growth was slower than expected - gross domestic product rose at annualised 3.1 percent pace in the first quarter, below a forecast of a 3.6 percent rise - the dollar held its gains.
Expectations that the Federal Reserve might quicken the pace of US interest rate rises have buoyed the dollar.
"(Gold) is still stuck in a range between $425.00 and $445.00. If it breaks $430.00 it could to down at $428.00, and if it breaks $438.00 it could reach $440.00 or $445.00 again," one trader said, adding the market had seen some fund selling earlier.
Gold has slid away from a five-week high scored earlier in the week, but analysts said it remained well positioned for gains on economic uncertainty.
Precious metals consultancy GFMS said on Thursday gold prices may punch above last December's 16-1/2 year high of $456.75 on renewed investor buying this year.
It said in its Gold Survey 2005 that world gold investment, which fell in 2004 to less than 300 tonnes, was set to surge again after recovering strongly in the second half of last year.
The world's third-biggest gold producer Barrick Gold Corp reported a nearly doubled first-quarter profit on Thursday at $51 million, benefiting from higher gold prices.
The miner continued to reduce its hedge book which stood at 13.3 million ounces of future gold production by March 31 compared to 13.5 million at the end of 2004.
Hedging has proved unpopular with investors in today's higher gold price environment and Barrick has pledged to whittle down its forward sales position by delivering output into set price contracts.
In other precious metals, silver eased to $7.04/7.07 an ounce, compared with New York levels of $7.12/7.14. Platinum also dropped to $862.00/866.00 from $867.00/872.00, while palladium stood at $197.00/201.00, from $200.00/203.00.