LONDON, Nov 11: Gold dipped in Europe on Tuesday, as a downturn in the stock markets and commodities such as oil and industrial metals weighed on prices.

However, the softer dollar helped to limit losses.

Prices are likely to consolidate in the short term, analysts said, with the market eyeing the outcome of this weekend’s G20 summit in Washington, where world leaders will discuss the financial crisis.

Spot gold was at $739.50/741.50 an ounce at 1053 GMT, little changed from $745.75 late in New York on Monday, when it rose as much as 3 per cent.

Gold (climbed) yesterday on the back of everything else, but those supportive factors have turned negative, said Simon Weeks, head of precious metals at the Bank of Nova Scotia.

Oil came down, stock markets came down, commodities came down, and gold came with them, he added.

The softer dollar is lending some support to gold, which is often bought as an alternative investment to the US currency and tends to move in the opposite direction to it.

The euro rose against the dollar after data from the ZEW Institute showed an improvement in German economic sentiment, although a slip in European shares is keeping a lid on gains.

The FTSEurofirst 300 extended losses, tracking falls in Asia and on Wall Street, with fears over the prospect of a global recession outweighing the optimism sparked by a near $600 billion stimulus package announced by China last weekend.

On a scale of one to ten, based on what we are seeing or can observe, we would place current jewellery demand at a 6 or 7, not a bad score considering the weakness in the global economy, said UBS analyst John Reade in a note.

Platinum prices slipped a touch after climbing on Monday as traders hoped the Chinese stimulus package could lead to a recovery in demand for the more industrial precious metals.

Platinum and palladium prices have tumbled in recent months as traders fretted over the outlook for demand from carmakers, who consume around half of the world’s platinum group metals.

Spot platinum was quoted at $831/851 an ounce, down from $847 late in New York on Monday. Among other precious metals, silver slipped to $9.98/10.06 an ounce from $10.18.—Reuters