US MIDDAY: gold slightly up

US gold futures inched up early on Tuesday, following strong gains from the previous session, lifted by physical buying, a lower dollar and soft oil prices.
At 10:09 am EST (1509 GMT), benchmark gold for February delivery on the COMEX metals trading division of the New York Mercantile Exchange was up 60 cents at $627.50 an ounce, traded in a narrow range between $624.70 and $629.00 an ounce.
Gold fell as much as $2.20 in early trade. By 9:15 am EST (1415 GMT), the February contract had reversed course and traded higher.
A broker at a precious metals dealer said gold's back-and-forth trading was largely dollar-related. "We've been testing $625 (on a spot basis). There is good physical demand," he said. "There seems to be selling around $630. Gold was trading in a relatively tight range."
The dollar slipped against the euro, with the euro supported by a robust survey of German business sentiment and by the unwinding of positions after the greenback's rally last week.
Carlos Perez-Santalla at Hudson River Futures attributed gold's early weakness to its sharply higher finish last Friday, when the February contract spiked 2.1 percent on fund buying.
"We are a little soft because we rallied too much on Friday. There was some selling in Asian countries last night. And that selling has filled into some profit taking from Friday," Perez-Santalla said. Gold is generally seen as a hedge against oil-led inflation, and it usually moves in the opposite direction of the dollar.
Spot gold was quoted at $626.60/7.60, higher than $625.60/6.60 an ounce in late trade on Friday. London's gold fix was $625.60.
In other precious metals, COMEX March silver was down 1.50 cents at $12.865 an ounce, traded between $12.805 and $13.035. Spot silver was down at $12.770/2.820, against $12.780/2.850 an ounce in late Friday trade.
Silver was fixed in London at $12.840 an ounce. NYMEX April platinum eased 10 cents at $1,152.00 an ounce. Spot platinum fetched $1,139.00/1,145.00. NYMEX March palladium was up $1.05 at $336.00 an ounce. Spot palladium was quoted at $329/334.00.