Gold was trapped in tight ranges in Asia on Friday after bomb attacks in London ignited safe-haven buying and pushed the metal to nearly $429 an ounce. Spot gold was quoted $424.00/424.50 an ounce, little changed from 423.75/424.50 an ounce in New York.
Gold, regarded as a safe-haven investment in times of uncertainty, rose to a one-week high at $428.50 after four blasts tore through packed London underground trains and a bus, killing at least 37 people.
The four explosions, within an hour of each other during the morning rush hour, wounded about 700 people in the British capital's deadliest peacetime attack and disrupted a summit of world leaders.
"I wouldn't expect more buying unless we have some further shocks to come, in terms of further bombings or more serious threats. The dollar is generally recovering the losses it made," said one dealer in Sydney. "The reaction overnight was probably a little bit overdone.
We probably see the continuation of what we've seen maybe a bit of a sideways move in gold in a few days, and a gradual move down again," he said.
Some dealers expected gold to trade in a tight range of $423 to $426 ahead of the release of US employment data later in the day, which could provide fresh leads for the dollar.
Gold normally tracks moves in the dollar against other currencies. The euro was slightly weaker from New York's levels at around $1.1938. Before news of the explosions hit the market, analysts said they expected gold to firm as it had held well in the face of heavy liquidation in the week.
Gold hit its highest in 16-1/2 years late last year near $456 but has failed twice so far in 2005 to revisit that level. Silver was at $6.94/6.96 an ounce, versus $6.96/6.98 in the US market.
Platinum was at $866/871 an ounce, versus $862.10/868.50 last quoted in New York. Palladium was slightly higher at $180/185 an ounce.