Daily Gold Update

Source: Reuters

London— Gold remained trapped in a narrow range in Europe early on Wednesday in a market eyeing the dollar with the metal likely to stay within the $258-$264 range for the next couple of days, traders said.

"One should not expect surprises with gold. Everything looks quiet here. It's, more or less, like yesterday," a trader said.

The market was well supported by tight short term lease and although a strong dollar had induced some bearish sentiment, good physical demand had provided some support to the market, traders said.

"The strong dollar gives a weaker tone to gold. But there is good physical demand around the $260 level and the market seems well balanced this morning," a trader said.

One-month forwards on Reuters page indicated 2.26875 percent, slightly up on last week's levels.

Market talk during earlier hours had mentioned some siginificant overhead selling, the trader added.

At 0959 GMT spot gold indicated at $259.90/$260.40, versus Tuesday's New York close at $260.80/$261.30.

Silver was seen tracking gold in uneventful trading.Spot last indicated at $4.35/$4.37, down from Tuesday's New York close at $4.37/$4.39.

Traders said many market players have continued to show interest in platinum and palladium in a volatile market. The two metals, likely to test higher numbers during the day, have seen their prices soar over the past two days, prompting an increase in speculative short positions.

"Temptation to make a quick buck is very big for many. Even for me, to be honest," a trader said.

Spot platinum indicated at $625.00/$632.00, versus last New York close at $624.10/$639.10 while palladium was at $755.00/$785.00, up from the last close at $720.00/$750.00.

Less than a week ago, palladium traded at around $650 a troy ounce while platinum at some $570. "In a deteriorating economic environment we believe PGM prices wil continue to trade in a volatile manner," Deutsche Bank said in a report.