Gold moved in a tight range in Asia on Thursday, licking its wounds after a pullback in crude oil prices and a rebound in the dollar sparked a heavy sell-off in New York's precious metals market.
Gold has lost around 1.6 percent since it touched a six-month peak of $430.20 an ounce on Monday, but dealers said many jewellery makers were keen to wait for prices to fall further.
Spot gold was at $423.20/423.70 an ounce, down slightly from $423.55/424.30 last quoted in New York on Wednesday, when gold fell $2.5 an ounce.
Rising oil prices have helped pushed up gold, which is traditionally seen as a hedge against inflation. Dealers expected the yellow metal to move in a $422 to $425 range for the rest of the Asian trading session.
"We might see a wider trading range in Europe but it will all depend on the oil prices and movements of the dollar," said one dealer in Hong Kong, a key bullion-trading city in East Asia.
"I don't see much activity in Hong Kong because physical buyers are hoping for the price to move down to around $400.
Gold is still consolidating at the current level and everyone is taking a wait and see attitude," he said.
Crude oil shed another 93 cents in Asia to $51.53 a barrel after data showed a bigger-than-expected increase in US crude oil supplies.
In the currency market, the dollar lost some of its New York gains as a drop in oil prices only provided a short-lived impact. The euro was at $1.2716 versus 1.2713 in late New York trade.
Some currency dealers said dollar selling would gain momentum if Democrat John Kerry defeated President George W. Bush in the US presidential election, but others believed it would have little impact.
"The effect that the US elections will have on the dollar are driving the market at the moment," said N M Rothschild in a report.
"And with only days to go before the November 2nd presidential elections, markets will become increasingly jittery as traders square positions."
"Also weighing on gold are fears that the largest speculative long positions on Comex could be liquidated if prices fail to break higher soon," it said.
In Tokyo gold futures, the new benchmark October gold contract was trading at 1,447 yen per gram, down 16 yen. Silver was at $7.12/7.15 an ounce, compared with $7.14/7.17 last quoted in New York.
Spot platinum was at $830/835 an ounce, compared with $833/838 last quoted in New York.
Sister metal palladium was at $213/218 an ounce, versus $211/217 in the US market.
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