Gold, two steps ahead: how the rich keep getting richer. New gold rpt Wealthdaily.com/Gold_Report Gold rings are seen on display for customers at a jewellery shop in Seoul A... Gold prices rose back above $1,490 an ounce in Europe on Wednesday as a retreat in the dollar encouraged buyers to hunt bargains after the metal's three-day decline, and as oil prices rebounded. Prices are down nearly 5 percent so far this week, with investor sentiment towards the precious metal turning more cautious as gold holders worried it may struggle to rise significantly after hitting record highs this month. Spot gold was bid at $1,494.09 an ounce at 0832 GMT, against $1,484.85 late in New York on Tuesday. U.S. gold futures for June delivery rose $14.30 an ounce to $1,494.50. Gold demand was supported by the dollar's slip against the euro as the single currency recovered from the seven-week low it hit earlier this week. A softer dollar makes assets priced in dollars cheaper for holders of other currencies. Interest in physical gold bars and coins in particular has picked up as they become more affordable. "The demand for physical is rather interesting again," said Afshin Nabavi, head of trading at MKS Finance. "Gold could not break $1,470 yesterday, and so a bit of short covering overnight, as well as this demand, has taken us higher." Premiums for gold bars in Asia increased slightly from a week earlier, as buyers from China and elsewhere in the region took advantage of a dip in prices to buy physical materials. The softer dollar also helped lift other commodities, with oil prices rebounding more than $1 a barrel after two straight sessions of declines, as a surprise drop in gasoline stocks allayed concerns about weaker demand ahead of the peak summer driving season. Gold tends to track crude prices, as the metal is often bought as part of a basket of commodities in which oil is the dominant part, and because it is sometimes seen as a hedge against oil-led inflation. SILVER OUTPERFORMS Silver outperformed gold in early trade, rising nearly 3 percent to a session high at $34.86 an ounce. It remains well off the record $49.51 an ounce it hit late last month, however, having tumbled by as much as a third in early May. Silver was later at $34.76 an ounce versus $33.91. While holdings of the world's biggest silver exchange traded fund, the iShares Silver Trust , rose by nearly 150,000 ounces on Tuesday, investors' sentiment towards the metal remains wary after its sharp price correction. Its relative value to gold has moved off the 28-year highs it hit when both metals were near record highs. "Last week's drop in silver prices helped support a rebound in the gold/silver ratio to 43 as of 17 May, but it remains way below the 2000-10 average ratio of 62," Standard Chartered analyst Daniel Smith said in a note. "Silver will probably bounce back at some point (potentially sharply), but for now further falls seem the most likely scenario," he said. Among other precious metals, platinum was at $1,773.74 an ounce against $1,762, while palladium was at $731 against $719.75. Palladium prices have risen 3 percent so far this week as miners, refiners, analysts, traders and end-users of the platinum group metals meet in London for Platinum Week. Johnson Matthey, whose report on the PGMs market marked the start of events, predicted a strong year for palladium prices, with the market remaining in deficit. (Reporting by Jan Harvey; editing by Jason Neely) Follow us on Facebook to get the latest finance and business related updates. Click here for live stock market updates.

Source