Gold eased in Europe on Thursday as growing optimism over the economic recovery curbed interest in the metal as a haven from financial market risk, and as Asian buying dissipated during the Lunar New Year holiday.
Spot gold was bid at $1,328.05 an ounce at 1300 GMT, against $1,336.00 late in New York on Wednesday. U.S. gold futures for April delivery fell $3.90 to $1,328.20.
Concerns over the fallout from unrest in Egypt, where six people were killed after supporters of president Hosni Mubarak opened fire on protestors overnight, have underpinned prices, but have not sparked fresh investment, analysts said.
Since the sell-off across the commodity complex in early January, oil and industrial metals have rallied but the precious metals have been the laggards, said RBS analyst Daniel Major. That is due to a combination of better economic data (and) less need for safe havens.
Whilst the Egyptian events have clearly had some kind of risk-negative impact on equity markets and the broader commodities complex, I don't think it has been sufficient to drive investors in Europe and the United States into gold.
Other commodities rose on Thursday, with Brent crude oil climbing above $103 a barrel after violent clashes in Egypt and copper breaking $10,000 a ton to a record high.
Gold dipped to a session low at $ an ounce after the European Central Bank opted to leave interest rates unchanged at a record low 1.0 percent. Attention is now focused on ECB President Jean-Claude Trichet's press conference at 1330 GMT.
ECB President Trichet will likely maintain his recent hawkish stance, given January's above-target CPI print, said UBS analyst Edel Tully in a note.
Rising market expectations for rate hikes in Europe, the UK and elsewhere have contributed to gold's recent descent... this relationship is likely to remain in place in the near term, so hawkish comments from Trichet could pressure gold later today.
European shares softened a touch ahead of the statement, while the euro hovered near the previous session's 12-week high versus the dollar.
LUNAR NEW YEAR DENTS ASIAN BUYING
Buying was also lackluster in key gold consuming regions, with buyers absent in China, Hong Kong and Singapore for the Lunar New Year holiday.
From a technical perspective, gold prices seem to have built a base above $1,300 an ounce, but is looking vulnerable to further declines, according to analysts who study charts of past price moves to determine future direction.
The price action between the $1,320s and $1,340s is forming into a typical consolidation pattern, said ScotiaMocatta in a note. While the $1,354 holds we believe the risk is a return to the downside toward $1,308.
Silver was bid at $28.22 an ounce against $28.36. The world's largest silver-backed exchange traded fund, the iShares Silver Trust, reported another outflow on Wednesday.
Both the iShares fund and the biggest gold ETF, the SPDR Gold Trust, saw hefty outflows in January, with the iShares seeing its biggest ever one-month decline and the SPDR fund its second-largest such outflow.
Platinum was at $1,821.49 an ounce against $1,829.99, while palladium was at $803.97 versus $811.22.
Data showed Switzerland, one of the leading clearers of platinum group metals in Europe, imported 6,374 kg of platinum and 829 kg of palladium in December.