Gold edged up in Europe on Friday, supported by good physical demand and weakness in the US currency, but softer crude oil prices could prompt some players to exit the market, dealers said.
The metal remained fundamentally strong and could gather enough steam to spike further in the longer term, but faced a risk of fund-led correction in the immediate future, they said.
Spot gold traded at $462.70/463.50 an ounce by 1433 GMT after a dip below $460 to three-week lows the previous day, compared with New York's $460.90/461.60 late on Thursday. It surged to a near-18 year high of $480.25 last week.
"The market has been quite quiet today," said Yingxi Yu, analyst at Barclays Capital.
"It has shown to be very well supported above $460 over the past few days and this shows that the fund interest is still intact."
Some traders said gold could face resistance from buyers at around $475 an ounce, but any drop to about $457 could generate fresh interest in the metal.
The dollar's rally ran out of steam on Friday, while the euro gained support from hawkish comments made by European Central Bank chief economist Otmar Issing.
Euro was quoted at $1.2027/29 by 1435 GMT, compared with the US close of $1.2015 on Thursday.
"The market is consolidating and I would expect a softer trading range today," said a precious metals trader in London.
Dealers said weak crude oil prices eased inflation worries to some extent, prompting some players to offload their positions.
Oil prices slipped below $60 a barrel after a 2.2 percent slide the previous day as US oil and natural gas stocks swelled, revealing weaker demand in the world's top consumer.
"With gold now some $20 off the recent highs, this could present a last minute buying opportunity for physical jewellery demand, and also a chance for investors or speculators to add on to their positions," Standard Bank said in a report.
Physical demand rose in India, the world's largest gold consumer, ahead of the peak festival time in early November. Buyers in other parts of Asia were also active because of the Eid al-Fitr Muslim religious festival next month.
Analysts said consumer demand and some light funds buying emerged at price dips, halting further fall in prices the previous day.
In other precious metals, platinum rose to $927/931 an ounce from $921/925 an ounce late in New York.
Sister metal palladium was quoted at $207/210 an ounce from $206/210 in the US market. Silver was flat at $7.60/7.63.