Gold rebounded in Asia on Tuesday thanks to buying interest triggered after the metal's sharp falls in New York, but public holidays in the region slowed trade.
Markets in India, Singapore and Malaysia were closed for a Hindu festival. Dealers expected gold to trade in a range of $465 to $468.50 an ounce until the New York market reopens.
Spot gold edged up to $465.75/466.50 an ounce in afternoon trade from $464.80/465.60 an ounce last quoted in New York on Monday, when it fell more than $8 after a stronger dollar and falling oil prices ignited heavy selling.
Dealers were also pondering the impact on bullion prices of Barrack Gold's surprise take-over bid for Canadian competitor Placer Dome. Darren Heathcote, head of trading at N M Rothschild in Sydney, said crude oil might be trading below $60 a barrel but it didn't necessarily mean gold was losing its allure as a hedge against inflation.
"I still think it really needs to get back into the low $50s before we can really see that arguments start to lose a lot of weight. I am still bullish on gold at the moment," he said.
Some dealers said gold could move lower before it consolidated and tested new highs above $480. Gold has lost around 3 percent in value since hitting a near 18-year high of $480.25 on October 12, when fund managers bought the metal on worries about rising energy costs. Palladium continued to show some resilience and rose to $226.50 an ounce on Monday, just below a one-year peak of $227 hit last week.
The white metal is used in jewellery and as an auto catalyst to clean exhaust fumes.
Spot palladium was unchanged from New York levels at $222/226 an ounce in Asia. "I don't know what the global stock level is, but palladium is technically bullish and the upturned is intact," said one dealer in Hong Kong, who pegged an upside target at around $300.
The world's largest palladium company, Norilsk Nickel, has raised its 2005 output forecast to 3.08 million ounces, or 95.8 tonnes, from an estimate of 3.0 million ounces.
But the ample supply failed to diminish investor interest in palladium as jewellery makers in China and Japan abandoned sister metal platinum in favour of the cheaper metal, said dealers.
Dealers said the currency market could guide the precious metals market ahead of a Federal Reserve policy meeting later on Tuesday, at which the fed funds rate is expected to be raised to 4 percent from 3.75 percent.
The euro was at around $1.1979, lower than late New York levels.
The dollar gained strength after robust US data pointed to a steady diet of interest rate increases.
Platinum fell to $932/936 an ounce from $936/940 in New York.
Investors refrained from taking positions too heavily ahead of an interim report by London-based precious metals refiner Johnson Matthew Plc on November 15. Silver inched up to $7.56/7.59 an ounce versus $7.52/7.55 in the US market.
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