Gold slips in Europe

Gold erased earlier gains and slipped 1.5 percent in late European trade on Friday as a rise in the dollar prompted sent investors to the exit.
Spot gold fell as low as $645.00 before moving to $642.30/643.10 by 1441 GMT. The metal closed at $649.80/650.60 an ounce late in New York on Thursday, when it added more than one percent after the dollar weakened and fund selling subsided.
"It's book squaring ahead of a long weekend. People are taking profits," a precious metals trader in London said.
"Gold will continue to drift lower at the moment as the dollar seems recovering as well."
Britain will have a spring bank holiday on Monday, while the US market will be shut for the Memorial Day.
The dollar vaulted to session peaks against the euro and yen in thin pre-holiday trade, reversing earlier losses after a key US inflation indicator came in as expected.
Gold had surged to a 26-year high of $730 on May 12 as funds and investors poured money into the metal on worries about rising oil prices, tensions over the Middle East and uncertainty in the dollar's outlook.
But prices sharply fell after that because of aggressive selling by investors following a rise in the dollar.
Barclays Capital said the bullish sentiment got dampened because of the recent sell-off, but could turn positive in the medium-term after the end of the nervousness in the market.
"Over the near term, though, the market is still struggling to find a clear direction and we remain wary of further liquidation of the large speculative length," it said in a report.
John Reade, precious metals analyst at UBS Investment Bank, said the metal was probably trying to establish itself in a range of $638-$675 an ounce.
"I doubt people will want to climb into this market and re-establish long positions ahead of the weekend...we might see people coming back onto the long side sometime next week."
But market experts said prices were poised to advance after a period of stabilisation as the factors, which supported the metal to climb to new highs, were still in place.
Daniel Sacks, head of resources at Investec Asset Management, said gold was driven upwards by fears about oil-induced inflation, geopolitical turmoil and a weaker dollar. Despite recent corrections, none of these factors had changed.
Dealers noted light physical buying in Asia. Premiums for gold bars were unchanged at zero in Singapore, centre for bullion trading in Southeast Asia.
They also kept a watch on oil, which extended gains above $71 a barrel, buoyed by healthy US economic growth that hinted recent record-high prices may not hit robust demand.
Gold is often seen as a hedge against inflation.
Platinum fell to $1,284/1,292 an ounce from $1,287/1,297 late in New York, while palladium was down at $345/350 an ounce from $350/358.
Silver declined to $12.53/12.63 an ounce from $12.66/12.76.