LONDON—Spot gold fell slightly in Europe as a rebound in the dollar offset firm physical demand out of Asia.
In mid morning, the spot price of gold was $1,672.20 a troy ounce, down from bid levels of $1,674.50 late in New York on Wednesday.
The market has been closing in on resistance around the key $1,700 per ounce region in recent days, "helped by renewed physical interest from Asia ahead of the festival season in India, with physical spot premiums holding high at the moment," said VTB Capital analyst Andrey Kryuchenkov.
Physical purchases in China and India, ahead of the key gold-buying wedding and festival season, have been in decent volumes, and are expected to continue to escalate, traders and analysts said.
Still, bullion also continues "to trade with riskier assets, defying its safe haven properties while it moves against the U.S. dollar," Mr. Kryuchenkov said.
Gold is priced in dollars, so it tends to fall when the dollar gains, making it more expensive to purchase in other currencies.
The dollar gained against the euro Thursday as concerns lingered about Europe's debt problems and slowing global growth, despite recent signs of progress on tackling the European crisis.
Analysts said minutes of the Sept. 20-21 U.S. Federal Reserve Open Market Committee meeting, which late Wednesday revealed a long discussion of what steps could be taken to give the economy further support, should help to provide some support to prices.
In other metals, spot silver had fallen to $32.110 per ounce from about 432.60 late in New Yorki. The market, which is thinly traded and therefore tends to record wider intraday moves than its sister metals, has been range-trading between $31.130 per ounce and $33.050 since Monday.
Meanwhile, spot platinum was at $1,534.25 per ounce, from $1,550 and spot palladium was at $601.25 per ounce, from $613.00.
One London-based trader said the platinum-group metals, which tend to trade in tandem with base metals because of their industrial applications, have held up well given a sharp slide across markets on the London Metal Exchange. In mid morning, LME three-month copper traded down 1.7% at $7,397 a metric ton.
Write to Rhiannon Hoyle at rhiannon.hoyle@dowjones.com
