LONDON, Sept 13: Gold prices remained under $450 an ounce in Europe on Tuesday as funds which took the metal to a new high for the year on Monday took a breather, traders said.

If the market could get back over $450 though, traders said gold stood a good chance of breaking back through last December’s peak at $456.75, to its highest in 17 years.

Spot gold was at $448.20/448.90 a troy ounce, slightly down from New York’s late quote on Monday of $449.60/450.30.

Simon Weeks, director precious metals at ScotiaMocatta, said he expected the market to see relatively quiet conditions until the Federal Reserve meeting next week.

Financial markets have been debating whether the US Central Bank will continue to hike interest rates in the aftermath of Hurricane Katrina.

He said in the medium and longer term the risks to gold continued to lie to the upside, with a move through $500/oz a distinct possibility over the next 18 months.

In the shorter term, a second London trader was looking for another attempt to move back up through $450.

If we break $450 then it should move up to $453, but if it fails at $450 again, we may see it back down to $445, he said.

Gold in euros was firm at 365 euros, just off a three-month high above 366 scored on Monday.

Tokyo gold futures extended gains overnight to a fresh 13-year high.

High prices kept physical buyers on the sidelines in Asia though, with an inauspicious period in India over the next two weeks seen restricting dealings in the world’s biggest gold consumer.

But demand should subsequently pick up there with the Indian festival of Diwali starting on November 1.

Silver moved little in Europe, drifting down to $6.98/7.01 from $7.04/7.06.

Platinum edged up to $907.00/911.00 from $905.50/907.50, while palladium was stagnant at $182.00/186.00. —Reuters