By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Gold slipped in the Asia session Wednesday, as caution persisted due to a lack of clear signals that a resolution is in sight for Europe's sovereign-debt crisis, while dollar strength added to the pressure. Traders said physical demand from India, the world's largest gold consumer, is limiting the downside risk for the yellow metal. Prices have dipped sharply from a record high of $1,920.94 a troy ounce reached Sept. 6. At 0525 GMT, spot gold was down $13.40 at $1,636.30/oz, after falling more than 1% to a session low of $1,631.40/oz. "There is no clear direction in the market, and price movements of 1% both ways are becoming the norm," a Tokyo-based trader said. Although euro-zone officials have said they are taking steps to help tide Greece and the region over the debt crisis, the Financial Times reported Tuesday that a split has developed among member countries over terms of Greece's second bailout package. The euro was at $1.3571 compared with $1.3584 late Tuesday in New York. Delhi-based Insignia Consultants Director Chintan Karnani said physical demand for gold and silver in India is very high following the correction in prices from record levels. "In some cities there was a shortage of physical silver," and demand will likely remain high for the next month, Karnani said. Gold and silver demand rises in India during the festive and wedding season, which starts in a few days. Analysts said that a drop in silver prices of more than 15% earlier this week has made investors wary over volatility and reluctant to take long positions that they may find difficult to exit if the market drops sharply. Barclays Capital said silver has the weakest supply-and-demand dynamics among the precious metals, and the lack of supportive fundamentals makes it more susceptible to volatility. Spot silver was down $1.03 at $30.85/oz, after falling more than 3% to a session low of $30.835/oz. Spot platinum was at $1,547/oz, down $6, while palladium fell $5 to $641/oz. Commerzbank analysts said platinum has yet to follow the lead of gold and silver and stage a recovery after drastic slides Monday. They noted that the platinum-to-gold price ratio is at 0.94, its lowest level since January 1992. Still, they said that at current price levels, platinum could attract new buyers given that gold has been rarely more expensive than platinum in the past. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

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