Gold held steady in Asian trading on Tuesday as jewellers and investors bought at lower levels, after losing nearly $4 an ounce in New York. Spot gold was at $422.15/422.65 an ounce after touching a bid high of $422.60 and a low of $421.50. That compared with $422.25/423.00 late in New York. The yellow metal had dropped to a near three-week low at $419.75 an ounce on Monday as dealers sold back safe-haven assets after on Sunday's historic election in Iraq passed without any major disruptions.
"I still see some demand before the Chinese New Year. India in particular shows good interest in gold," said one dealer in Singapore, a centre for bullion trading in Southeast Asia.
The Lunar New Year holiday begins on February 9. Premiums for gold bars were steady in Singapore at 50 US cents an ounce to London spot prices Gold is traded mainly in bars but is both traded and used in coinage. A standard gold bar in the spot market is 400 troy ounces or 12.5 kg.
Dealers in India, the top world consumer of gold, said demand would remain strong, as lower prices and an ongoing wedding season spur buying. Gold is down about 7.6 percent from a 16-1/2-year high hit in December of $456.75 an ounce.
Buying of gold jewellery, used for dowries in India, will then slow in March when the auspicious period for marriage ends, traders said. A dowry is the payment in cash, goods or both usually involving gold often given by a Hindu bride's family to the groom's as party of their marriage rites.
In other precious metals, platinum hit a two-month high at $880 an ounce on strong buying in Tokyo gold futures Spot platinum was trading at 880/885 an ounce, versus $869/873 in late New York trade.
Sister metal palladium was little changed at $187/192 an ounce. Some Tokyo dealers said TOCOM platinum was ripe for short-covering as local investors accumulated short positions on a view that high platinum prices had dented demand in China, where jewellery makers had shifted to more affordable white gold and palladium.
In Hong Kong, a key bullion trading centre in East Asia, many gold jewellery manufacturers have ceased operations ahead of Chinese New Year.
For the week ahead, markets are awaiting a US interest rate decision by policy makers on Wednesday, US jobs data on Friday and a weekend meeting of Group of Seven nations that could offer fresh direction to the dollar.
Leon Lee, a dealing officer at the Bank of China in Hong Kong, said gold would be trapped in a range of $420 to $425 an ounce. "I think $428 is a strong resistance. People still want to wait and see whether the US will increase interest rates," he said.
The euro was trading at $1.3050 against $1.3033 in late US trade. Silver was unchanged from late levels in New York at $6.72/6.75 an ounce.
In Tokyo, the benchmark December gold futures contract shed two per gram at 1,412 yen.