Gold prices drifted back in late afternoon trading in Europe on Thursday, taking their cue from modest dollar gains after US economic data, dealers said. However, gold's move was low-key and the market remained in a range ahead of potentially more significant dollar responses to Friday's US economic data. "For now gold should remain around $430-438, but tomorrow's non-farm payrolls will give a better idea of short- to mid-term direction," James Moore of TheBullionDesk.com said.
Friday's US payrolls report for February is scheduled for 1330 GMT, with Wall Street economists looking for around 220,000 new jobs.
Thursday's US manufacturing data for February broadly matched expectations.
By 1536 GMT spot gold was at $430.45/431.20 a troy ounce, versus late levels in New York on Wednesday of $432.20/433.00.
Gold has spent most of the week consolidating the previous month's rally, which saw bullion at its highest for the year at $437.55 on Monday.
Renewed dollar weakness was the main trigger, attracting investment funds back into metals, with sharp gains in industrial metals bolstering general sentiment in commodities.
Gold's price drift this afternoon took place against a background of further developments in the IMF sales proposal as South Africa's Treasury supports the proposed use of such gold sales to finance debt relief for poor countries.
Finance Minister Trevor Manuel said on Thursday this need not disrupt the market, however.
In a written reply to a question from parliament, Manuel said he favoured including five-year quotas for gold sales allocated to central banks in 2004 for the process, as this would ensure the local gold mining industry was not affected.
"The sale of IMF gold when done in a managed manner that is transparent, clearly communicated...and ideally along the central bank gold agreement, will mean that the market can price in the IMF gold sales and thus cause no disruptions to the market price of gold," he said.
In other metals palladium broke out of a stagnant range and rose to its highest in a month, fixing at $193.00 an ounce.
However, the metal, used in car exhaust systems, was unlikely to make significant gains given that the market was oversupplied and had few prospects for buoyant demand growth, analysts said.
"Despite the firm tone the scale of speculative longs and bearish fundamentals suggest pushes higher will be met with long liquidation," Moore added.
Spot palladium was at $195.00/200.00 versus New York's $184.50/189.50.
Platinum was indicated at $864.00/868.00 from $861.50/866.50, while silver stood at $7.23/7.26 from $7.19/7.22.
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