SINGAPORE(Dow Jones)--Gold prices were slightly lower in Asian trading Tuesday, as market participants continued locking in profits after last week's rally to record highs and waited to take their cue from European and U.S. data due later in the day. Spot gold was trading at $1,764.70 a troy ounce at 0500 GMT, down $1.50 or 0.1% from its late New York price. "People are just sitting back today and trying to get a sense of what's actually going on in the world," a Tokyo-based trader said. Many Asian market players are staying out of the market until the release of German and euro-zone second-quarter GDP at 0600 GMT and U.S. housing starts data at 1230 GMT. Much of the poor economic sentiment in the U.S. and Europe has already been priced into gold, he said. Nevertheless, he forecast a rebound in gold on any fresh jitters over the French banking sector. "If news comes out that they're having problems, then people will once again begin buying gold," the trader said, adding that he expects Chinese market participants to lead the flurry of buying. "The Chinese still prefer buying gold to buying equities at the moment," he said. A meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel later Tuesday to discuss proposals to strengthen the euro zone's economic governance could also provide direction. Analysts said that despite Asian profit-taking since last week's record high of $1,814.89/oz, gold remains well-supported in the medium term by Indian and Chinese buying and by lingering worries about the health of the European and U.S. economies. Barclays Capital said it expects prices to fall to $1,690/oz in the near term, before making a fresh break through $1,800/oz. The house expects gold to "confirm new highs toward $1,930/oz," it said Tuesday, reiterating its medium-term bullish outlook. Societe Generale noted a recent softening of investor interest, but said that robust physical consumption will offset this slowdown. "At present, we have a surprisingly healthy physical market, but a more nervous professional arena," the bank said. Silver prices fell alongside gold and were trading down 1.0% at $39.53/oz at 0500 GMT. Platinum was up 0.6% at $1,816/oz and palladium was 0.1% higher at $749/oz. -By Clementine Wallop; Dow Jones Newswires; 65 46154 082; clementine.wallop@dowjones.com

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