Gold prices moved higher in Europe on Wednesday, with renewed fund interest pushing currencies and US data into the background, traders said. "Fund interest has returned to the precious metals market today following yesterday's rather dull day," James Moore of TheBullionDesk.com said. "With the funds back on the bid, gold has continued to detach itself from the euro/dollar correlation, showing it is still a viable investment product," he said.
Spot gold pushed up to $428.20/428.90 a troy ounce by 1441 GMT, compared with late levels in New York on Tuesday of $426.75/427.50.
Inflation fears eased as a plunge in energy costs pulled US consumer prices down by 0.1 percent in May.
The dollar settled back after further data on capital flowing into the United States in April came in below expectations and too low to finance the trade deficit.
The euro rose to around $1.2104 after the figures., having earlier fallen to a fresh nine-month low of $1.2018.
Although gold seemsd to have relaxed its previously tight link with the euro, traders said any fall by the single currency through $1.20 might destabilise gold.
"The dollar/euro is threatening key support pegged between 1.20 and 1.18 with a break targeting 1.15 then 1.10, a scenario that would undermine gold's recent advance," Standard Bank London said in a daily report. Gold prices denominated in other currencies also calmed down after scoring new highs two days ago. Investors, disheartened by political instability in Europe and economic concerns in the United States, have turned to gold in recent days.
Rising oil prices, which were back above $56 a barrel, were also supportive for gold, with energy traders convinced Opec's likely decision to raise its official output ceiling would do little to cool the market.
Moore said gold had some tough hurdles to overcome before a return to the bull-run could be confirmed.
"Strong resistance is pegged around $430/432 with $435 and $438 above, while support should be found back to $418/420," he added.
Silver moved up in line with industrial base metals to $7.30/7.33 from New York's $7.24/7.27.
Platinum edged up to $875/880.00 from $871.00/875.00, while palladium rose to $188.00/192.00 from $184.00/188.00.
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