Gold rises in Europe

Gold was set for its largest one-day rise in over a week on Wednesday, after a modest retreat in the dollar encouraged a steady stream of buyers, while oil and other commodity prices also rebounded. Prices are down over 4 percent this month, with investor sentiment towards the precious metal turning more cautious as gold holders worried it may struggle to rise significantly after hitting record highs this month.
Spot gold was bid at $1,496.90 an ounce at 1412 GMT, against $1,484.85 late in New York on Tuesday. US gold futures for June delivery rose $17.40 an ounce to $1,497.40. Gold demand was supported by the dollar's slip against the euro as the single currency recovered from the seven-week low it hit earlier this week. A softer dollar makes assets priced in dollars cheaper for holders of other currencies. Interest in physical gold bars and coins in particular has picked up as they become more affordable.
"There has just been a general pick-up in stocks and other commodities and it looks as though there is a bit of a resumption of the bull trend," said ANZ head of metal sales Peter Hillyard. "I don't think the day has been dramatic, it's had a nice, steady tone all day."
"The demand for physical is rather interesting again," said Afshin Nabavi, head of trading at MKS Finance. "Gold could not break $1,470 yesterday, and so a bit of short covering overnight, as well as this demand, has taken us higher." Premiums for gold bars in Asia increased slightly from a week earlier, as buyers from China and elsewhere in the region took advantage of a dip in prices to buy physical materials.
Gold tends to track crude prices, as the metal is often bought as part of a basket of commodities in which oil is the dominant part, and because it is sometimes seen as a hedge against oil-led inflation. Silver put on a robust performance, rising by more than 3 percent and bringing the gold/silver ratio down for a second day, meaning it takes 42.7 ounces of silver to buy one ounce of gold compared with 44.4 ounces at the start of the week.
Silver was last up 3.4 percent on the day at $35.07. While holdings of the world's biggest silver exchange-traded fund, the iShares Silver Trust, rose by nearly 150,000 ounces on Tuesday, investors' sentiment towards the metal remains wary after its sharp price correction. Among other precious metals, platinum was flat at $1,762.74, while palladium rose 1.3 percent to $729.47.
Palladium prices have risen 3 percent so far this week as miners, refiners, analysts, traders and end-users of the platinum group metals meet in London for Platinum Week. Johnson Matthey, whose report on the PGMs market marked the start of events, predicted a strong year for palladium prices, with the market remaining in deficit.