Gold dips in Europe

Gold prices edged lower on Monday as some investors opted for cash in residual wariness about Dubai's debt shock, but losses were limited by a weaker dollar and dip buying. Spot gold stood at $1,172.20 an ounce by 1638 GMT, versus $1,176.70 an ounce late in New York on Friday, when it tumbled to $1,136.80 an ounce, its lowest since November 20.
The dollar fell 0.13 percent versus a basket of major currencies, boosting gold. A weaker dollar makes dollar-priced gold more attractive for non-US investors. News that two Dubai flagship firms planned to delay repaying billions of dollars in debt renewed credit fears and initially pushed gold down 5 percent on Friday as risk aversion rose. "Dubai was a trigger for a correction in gold, but ... it was a correction that might have come anyway given how much gold has risen," said Jesper Dannesboe, senior commodity strategist at Societe Generale.
"If there's any uncertainty gold will initially fall, people will close out long positions ... (but) I wouldn't be surprised if you get strong buying on dips," he added. Traders said investors had sold gold in a knee-jerk response to the Dubai debt worries last week, and after the precious metal hit record highs approaching $1,200 per ounce.
Gold's losses were also limited by comments from a senior Chinese official who said Dubai's debt crisis could be China's opportunity to snap up gold and oil assets.
Bullion is on track for a 12 percent rise in November alone and the precious metal is only 2 percent below its record high of $1,194.90 an ounce. So far this year it has gained around 33 percent. US gold futures for February delivery fell $2.2 to $1,173.50 on the COMEX division of NYMEX.
"The story about Dubai pressured gold but each time we had problems getting below $1,160," said Afshin Nabavi, head of trading at MKS Finance. "The market held extremely well despite the uncertainty so we have a good possibility to see it aiming back towards the $1,200 area." Bullion's long-term appeal remains undimmed, analysts said, due to increasing appetite from central banks to diversify their reserves and buy more gold, further dollar weakness and the metal's allure as a hedge against inflation.
"The central bank story is definitely bullish for gold. Also, the physical market still remains strong. We see buying from current price levels, particularly from Asia," Standard Bank analyst Walter de Wet said. "It's difficult to say whether it would head for fresh highs this week, but it's likely," he said.
Indian gold traders continued to make purchases as prices eased further and a stronger rupee, which makes the dollar-quoted asset cheaper, helped sentiment, dealers said. "There is no change in the fundamentals because US interest (rates) will still be low at least until next year's first half," said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore. Market volatility deterred investment, with holdings at the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, steady at 1,127.860 tonnes as of November 27.
Silver was at $18.27 an ounce versus $18.25 an ounce on Friday, when it hit a near two-week low of $17.66. Platinum was at $1,444 an ounce, up from a close of $1,436.50 an ounce on Friday, when it touched a one-week low of $1,418.50. Palladium was at $361.50 versus $362 an ounce on Friday, when it touched a one-week low of $351.