LONDON, Oct 5: Gold eased in Europe on Wednesday, pressured by a drop in oil prices and worries that funds could liquidate, but the long-term outlook remained bullish, dealers said.

Gold was expected to trade in a range, with worries about inflation and good consumer demand providing support for the metal which has risen more than four per cent in a month.

Spot gold was quoted at $463.50/464.25 a troy ounce, down from $466.10/466.80 when last traded in New York on Tuesday. It climbed to a near-18-year high of $475 on Sept 22.

Many people in the market are waiting for a correction to take place. It is very likely that gold could correct to $460 in the near term, said Yingxi Yu, analyst at Barclays Capital.

When you see prices falling to $465, funds are very willing to come in and support the price because they still believe in inflationary pressure that is going to last at least in the near term.

Oil prices edged lower on Wednesday to extend a 2.4 per cent slide a day earlier, but an expected drop in weekly US oil stocks following hurricane-triggered supply disruptions lent some support.

Market players were cautious and waiting for clearer trends as worries about inflation continued. Gold is often seen as a hedge against inflation.

Physical demand in India, the world’s largest consumer and importer of gold, was expected to pick up in the coming days. Consumer buying in other regions, such as the Middle East, was also good, dealers said.

Gold has dipped back towards $464 overnight and remains vulnerable short-term to a correction lower due to the scale of speculative longs and the recent gains in the dollar and profit taking in oil, TheBulliondesk.com said in a report.

The non commercial net long position rose to 166,100 contracts as of Sept. 27, from 158,126 lots a week earlier.

Gold buying, especially jewellery, surges in India during the festival season that peaks in November with Diwali, the festival of lights. Indians like to buy gold or present jewellery as gift during religious ceremonies.

Silver eased to $7.32/7.35 from $7.37/7.40 last quoted in New York, while platinum was almost flat at $913/916.

Palladium edged up to $191/194 from $190/194. —Reuters