Gold prices ran higher on Wednesday afternoon as a rising euro made the metal a cheaper buy for non-US investors. Spot gold was at $426.90/427.70 by 1545 GMT, compared with $422.05/422.80 quoted in New York late on Tuesday. The euro picked up after a strong survey on German business sentiment. It was last at $1.3070.
"Strong German business confidence data today has kept the currencies and in turn precious metals in an active mood," James Moore of TheBullionDesk.com said in a daily report.
Dealers said the market remained skittish within a broad $421-428 range, with no clear direction seen ahead of key events including elections in Iraq this weekend, US President George W. Bush's speech to the nation and the Group of Seven rich nations gathering next month.
Market participants will be looking at such events mainly for their impact on the dollar, although violence in Iraq would heighten gold's safe-haven appeal.
Currency watchers' main focus is early February's G7 meeting amid speculation about a revaluation of the Chinese yuan - ignited by China on Wednesday.
European policy makers recently urged Asian countries, especially China, to let their currencies rise to share the burden of the dollar's three-year decline.
Analysts were still broadly believers in a higher gold price in the longer term as they expected the dollar to continue its decline.
"We continue to expect the dollar to move lower, and gold higher, although identifying the trigger for such a move remains as elusive as ever," HSBC analyst Alan Williamson said in a report.
Williamson noted the latest statistics of the gold holdings on the streetTRACKS gold exchange-traded fund showed a sharp increase in bullion holdings over recent weeks.
Gold held in trust at the close of trading on Tuesday totalled 152 tonnes, up 54.1 tonnes from the start of the year.
In other metals, silver was steadier after prices lost more than two percent on Tuesday due to drops in gold.
Spot silver was last at $6.78.6.80 versus New York's previous $6.66/6.68.
Platinum firmed to $865.00/870.00 from $861.00/866.00, while palladium was down marginally at $187.00/192.00 from $188.00/193.00.
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