Gold bullion was hardly moving during subdued Monday afternoon trading in Europe, with the market opting to mark time after steep losses at the end of last week, while US futures were closed, traders said. The US market is closed for Independence Day, which has curtailed the investment interest and speculative liquidation, which drove prices two percent lower on Friday.
By 1425 GMT spot gold was at $427.30/428.00 a troy ounce, unchanged from New York's late quote on Friday.
"Prices have again tested below $427.00, where they have again found some buying interest at these levels, although a better test of underlying interest will be tomorrow and over the course of this week as the US markets return from their July 4 long weekend," Barclays Capital said in a daily report.
Similar static trends were seen in most other precious metals, bar palladium, which lost over seven percent to touch its lowest in nearly two years as speculators offloaded long positions.
Gold had loosened its inverse link to the dollar recently, but seems now to have hooked back into dollar/euro moves, as the US currency's strength contributed to the Friday sell-off.
The dollar powered ahead on Monday hitting a 14-month high against the euro as strong US manufacturing data led investors to see the Federal Reserve likely to continue tightening its monetary belt. The euro was around $1.1900, not far from its new low around $1.1888.
Metals broker Heraeus said in a weekly report it expected bullion to trade in a $422.50-435 range.
"Despite the latest set-back, we stick to our cautiously bullish view for the second half of this year, expecting at some stage the price to exceed the highs seen in December last year," it said.
Gold peaked at $456.75 on December 2, 2004, which was its highest since June 1988. It has since tried twice to get above there - in March and June - but failed each time.
Palladium was around its lowest in just under two years as funds sold long positions in an illiquid market, traders said.
"It's in very thin trade, with no US market. We're seeing some stop-loss selling by the funds and it is really struggling to find any buyers," one dealer said.
Palladium, used as a catalyst in diesel cars to clean exhaust fumes, had been stuck in a rigid $193-180 trading range for three months.
Spot slid 7.8 percent to $165 an ounce, its lowest since late July 2003, and was last quoted at $171.00/175.00 versus New York's late quote at $179.00/183.00.
Platinum earlier hit a three-week low at $866 - before bouncing back to $870.00/874.00 from $867.50/872.50.
Silver inched up to $6.88/6.91 an ounce from $6.84/6.87.
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