LONDON, Feb 17: Gold inched down in Europe on Friday, shedding overnight gains as the dollar rose against major currencies and as earlier buying prompted by a security scare in the United States subsided.

Traders were also looking to balance their books ahead of a long weekend in the United States and expected gold to move in a range of $535 to $550 an ounce. US markets will be shut on Monday for the Presidents Day holiday.

I can’t imagine anybody taking any aggressive position for the rest of today, said Alan Williamson, head of commodity Research at HSBC Bank.

Spot gold rose as high as $547.50 in Asia before easing to $544.50/545.40 by 1020 GMT, down slightly from $545.80/546.70 late in New York and below the 25-year high of $574.60 hit on Feb. 2.

Gold rose more than $6 in late US trade on Thursday as the dollar fell on a bomb scare at New York city’s biggest bus terminal.

The Port Authority station was briefly evacuated as police inspected a suspicious package, but it was reopened soon after the all-clear signal was given.

Oil moved close to $59 a barrel, extending the previous day’s gains and stemming a two-week slide due to swelling inventories in the United States despite tensions between Iran and the West.

Gold has been on a run higher since late last year as Middle East tensions and worries over firm oil and the dollar spurred fund buying.

The central bank held 3,427.8 tons of gold at the end of last year, worth more than $60 billion.

In other markets, Tokyo gold futures rose more than 1.5 per cent on short covering following the sharp recovery in New York, but they were vulnerable to technical sales following recent steep losses.

Key base metals fell and the market was expected to remain volatile on Friday. [nL17451540]

Platinum was up $1 at $1,006/1,010 an ounce from New York levels, while palladium rose to $278/282 an ounce from $274.50/278.50.

Silver was quoted at $9.38/9.41 an ounce, compared with $9.36/9.39.—Reuters