Gold slips in London

Gold fell on Tuesday as lower oil prices and a slightly firmer dollar prompted investors to cash in the previous session's gains. But with concerns remaining over the impact of the US government's proposed $700 bailout of the financial system, analysts said gold could be poised to trend higher.
Spot gold was at $895.55/897.55 an ounce by 1424 GMT, down from $900.20 an ounce at the nominal New York close on Monday. Commerzbank analyst Barbara Lambrecht said a combination of profit taking and a firmer tone to the dollar was "putting pressure on gold". She added, however: "We think prices are well supported by physical demand and by risk aversion, as people go into gold as a safe haven."
The government's $700 billion rescue plan for the financial sector initially cheered the markets, but pressured equities and the dollar in later trade as investors worried about its budgetary implications and doubted it would prevent recession.
While investors are taking the opportunity to book profits, bullion is likely to trend higher once again if the market remains volatile and the dollar fails to recover. "Despite its high volatility, gold's safe haven qualities are clearly attractive to investors, particularly in light of expected weakness of the US dollar," Fairfax analyst John Meyer said.
Pricier crude tends to benefit gold because the precious metal is bought as a hedge against oil-led inflation. Rising oil prices also boost confidence in commodities as a whole. Investment demand has been strong. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, saw a 30.2-inflow on Monday that brought its gold holdings to a record 709.62 tonnes.
Buying for ETFs, which issue securities backed by physical bullion, represents a major source of demand for gold. Silver tracked gold lower, slipping 2.5 percent to a session low of $13.07 an ounce. Spot silver was later at $13.31/13.39 against $13.40. Among other precious metals, spot platinum was trading at $1,209.50/1,229.50 an ounce against $1,244.50, while palladium edged down to $246/254 from $253.50.