By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Gold was trading higher in the Asian session Wednesday amid quiet trade, with a stronger euro supporting prices, but traders continue to be wary of downside risks after sharp falls this month. Traders already worried about a lack of physical demand are getting more anxious on slowing economic growth in major consumer China, and a proposed rise in import taxes in India, historically the biggest consumer. At 0501 GMT, spot gold was at $1,653 a troy ounce, up $2.20 from its previous close. It has fallen 2.6% this month and is off 7.7% from this year's high of $1,790.66/oz on Feb. 29. A weaker dollar supported, as dollar-denominated commodities become cheaper to holders of other currencies when the greenback retreats. The euro was at $1.3275 compared with $1.3226 late Tuesday in New York. "There is very little buying interest, investors are waiting for a move out of this range," a Hong Kong-based trader said. Gold has been stuck in a $1,640-$1,665/oz range over the past few sessions, discouraging investors, traders said. Triland Metals said in a note "whichever end of this range breaks first, there is a good chance of that break inducing a $30 move," but until then, the market is likely to keep consolidating after recent selloffs. Longer term, gold prices are expected to rise to $1,810/oz in 2012 supported by ongoing uncertainty in global financial markets, negative real interest rates in the U.S. and continued central bank purchases, Australian government's Bureau of Resources and Energy Economics economist Adam Bialowas said in a quarterly note. He expects official purchases to increase to 450 tons in 2012 from about 430 tons in 2011. On silver, Barclays Capital analyst Shiyang Wang said in a report Tuesday that the U.S. and China are expected to add 13 gigawatts and 17 GW of solar power capacity, respectively, in the 2012-2015 period, which could lead to stronger demand for silver in the event of both countries subsidizing large-scale solar panel production and use. At 0501 GMT, spot silver was at $32.10/oz, down 6 cents, platinum was at $1,648.75/oz, down $3.25 and palladium is at $688.86/oz, down $3.14. Standard Chartered analysts said in a note that palladium continues to be in favor among investors, who have been retreating from platinum since early March after increasing positions in January and February, which may lead some price consolidation. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

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