By Clementine Wallop Of DOW JONES NEWSWIRES SINGAPORE (Dow Jones)--Gold rose in Asian trading Wednesday as bargain hunters picked up cheap metal following heavy technically driven selling earlier in the week. Spot gold was trading at $1,637.48 a troy ounce at 0530 GMT, up $6.58 from its previous close but still down 4.3% since the start of the week. Gold traded as low as $1,622.30 Tuesday, with market participants liquidating their positions in favor of the dollar amid weak technical signals for the yellow metal. Despite Wednesday's early gains, gold could come under downward pressure later in the day on the back of sustained dollar strength, a Singapore-based analyst said. Wednesday's move higher "doesn't change the view too much given the bearish euro-dollar break still maintaining pressure on gold," he said. The euro was trading at $1.3030 compared with $1.3038 late in New York Tuesday after starting the week around $1.338. Commodities that are priced in dollars become more expensive to investors holding other currencies when the greenback is firm. A close below $1,618/oz Wednesday would signal another move lower, the analyst said. In the medium-to-long term however, gold's uptrend remains intact, gold developer G-Resources Vice Chairman Owen Hegarty said. "The selling we've been seeing is more to do with pre-Christmas book squaring and technicals than anything else," he said. "At the moment we've got tremendous volatility...and so it's no surprise we've got some mispricings that will be corrected." Next year, gold will trend higher as investors seek safe stores of value and central banks continue adding to their gold reserves, he said. Standard Chartered also remains bullish on the medium- to long-term prospects for gold, due to robust Asian demand forecasts and concerns over sovereign debt that should spur safe-haven buying, it said in a report Wednesday. "Consumers should look to buy the dips in gold, on the basis that any weakness is likely to be short-lived and problems in the global economy will be supportive over the medium term," it said. Silver also rose Wednesday, and analysts say they expect the grey metal to trade in line with gold for the rest of the year. Silver was trading at $30.92/oz, up 8 cents from its previous close. Platinum and palladium prices slipped, as concerns over the effect of the euro-zone debt crisis on industrial demand damped investor interest. Platinum was trading $2 lower at $1,470/oz, while palladium was off $2 at $640/oz. -By Clementine Wallop; Dow Jones Newswires; 65 64154 082; clementine.wallop@dowjones.com

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