Gold moved higher in Europe on Friday on a weaker dollar after US data showed core consumer inflation was lower than expected. Spot gold rose as high as $653.75 an ounce and was quoted at $653.15/$653.65 by 1419 GMT, against $651.20/$652.70 in New York late on Friday.
"Gold continues to track what the dollar is doing. If the euro can form a base here then it would start to look more positive for gold," said a European precious metals analyst.
"But it's early to say. Right now the market still feels a bit heavy. I would still be looking for gold to start making a recovery next week, but no surprises if we see another dip down towards the $640 level." The dollar fell against the euro, extending losses after a report showed US industrial production and capacity use below what was expected in May, suggesting inflation pressures could be easing.
A weaker dollar makes gold cheaper for holders of other currencies. Traders said the metal might continue trading in a range next week but was expected to gain in the medium to long term.
Pierre Lassonde, chairman of the World Gold Council, said gold had already seen this year's low and prices should stabilise around $700 an ounce in the long term on a bearish outlook for the dollar. In other precious metals, spot platinum was at $1,279/$1,283, down from New York levels of $1,280/$1,285. Silver was at $13.18/13.22, compared with 13.13/13.17 in the US market, while palladium was at $366.50/371.50, up from $365/370.
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