European gold eases

Gold prices marginally fell in subdued European trade on Tuesday with dealers keeping an eye on crude oil prices and the dollar for new leads.
The precious metal was seen getting support from high crude oil prices and good physical demand, but was under some pressure because of a strong dollar that extended gains on news of a sharp increase in US producer price inflation.
Spot gold traded in a narrow range and declined to $472.00/472.80 a troy ounce by 1453 GMT from $473.70/474.50 last quoted in New York on Monday.
"The market is looking to head higher, but it needs some new impetus and we haven't got that at the moment," said Peter Hillyard, head of metals sales, Europe, at ANZ Investment Bank.
Traders said gold could test last week's near-18-year high of $480.25 and the big number of $500 in the medium term, but current trade was expected to be range-bound.
The dollar, which also rose on strong foreign demand for US securities, had limited impact on gold on Tuesday.
A strong US currency generally makes dollar-priced gold costlier for holders of other currencies and lowers demand. But the metal has not strictly followed the rule in the last couple of weeks.
"Some support can be gathered from higher oil prices which have been rising on concerns of the threat of the tropical storm developing in the Gulf of Mexico," said Yingxi Yu, analyst with Barclays Capital.
Crude oil prices rose 2.8 percent the previous day but slipped below $64 a barrel on Tuesday, as the path of a new storm meant it could miss hurricane-battered Gulf of Mexico oil facilities.
Investors tend to be attracted to gold in times of economic uncertainty, especially amid potentially rising inflation, due to the metal's role as a perceived store of value.
Traders said gold could attract more buying at about $470 an ounce, but face resistance at around $475. But a break of that level could push the metal higher in the range of $478-$480.
They said gold could witness a drop in prices, if large funds liquidate their positions. The latest data from US exchange authorities showed that funds were holding a historically high level of gold.
"The scale of speculative long positions remains the main concern though, leaving the metal vulnerable to a correction lower, however any sharp drop is likely to offer good buying opportunities to physical players in India," James Moore of TheBulliondesk.com said in a report.
Silver fell to $7.77/7.80 from $7.79/7.82 an ounce in New York, while platinum traded at $927/933 versus $932/935.
Spot palladium was at $209/213 an ounce, compared with $212/215.