Gold picked up steam in Europe on Wednesday, although trade was sporadic with a fair amount of book-squaring as several investors kept a low profile ahead of US Federal Reserve interest-rate meetings, dealers said. Spot gold rose to $436.95/437.70 by 1453 GMT from $435.80/436.50 late in New York on Tuesday. The market earlier touched $433.50, its lowest since June 16.
Bullion was diverging again from currency fundamentals as the euro stayed weak ahead of the Fed's two-day meeting, with an expected interest rate rise seen bolstering the dollar's yield potential and widening the gap with historically low eurozone interest rates.
"Gold seems to be looking up - even with dollar strength but that could be window dressing due to end-month and first half book-squaring," one dealer said.
Other dealers said bullion was finely poised, having buckled near a fresh peak for 2005 last week, when prices hit a three-month high of $443.60.
"There was a large amount of buying last week, which saw a big increase in the COMEX (New York futures market) open interest. These people are going to be tested now," a second dealer said.
Wall Street economists overwhelmingly expect the Federal Reserve to raise its key interest rate by a quarter point when it meets this week, a Reuters poll found on Monday.
The Fed is expected to raise rates to 3.25 percent, while euro zone rates have been at a historically low 2 percent.
"With attention switching to the Federal Open Markets Committee meeting, gold is likely to continue to drift lower while the market waits for the statement wording," Julia Hamblett of Dresdner Kleinwort Wasserstein said in a daily report.
Dresdner put support on bullion at $434 ahead of $430, with resistance at $436 and $441. The market is now some $12 away from the 2005 high of $446.70 scored in March.
Silver was flat from late New York levels on Tuesday at $7.06/7.09.
Platinum was at $880.00/885.00 from $880.00/884.00 previously, while palladium was at $181.00/185.00 from $182.00/186.00.