LONDON, Jan 6: Gold slipped more than 2 per cent in Europe on Tuesday, extending the previous session’s losses, as the dollar strengthened to a fresh three-week high against the euro, denting the metal’s appeal as a currency hedge.

Platinum and palladium were little changed after poor sales figures from automakers, the major buyers of the metals, as the bad demand news was largely priced in, analysts said.

Spot gold was quoted at $843.00/845.00 an ounce at 1053 GMT, down from $858.90 late in New York on Monday but off its earlier low of $838.55.

US gold futures for February delivery on the COMEX division of the New York Mercantile Exchange were down $13.70 at $844.10.

But while the stronger dollar and reports of lacklustre jewellery sales weighed on prices, demand for the metal from exchange-traded funds — which issue securities backed by stocks of physical gold — remains firm.

ETF Securities, which operates Europe’s largest gold-backed ETF, said holdings of its Physical Gold exchange-traded commodity rose 2 per cent in the week to January 2 to 1.899 million ounces.

Holdings of the world’s largest bullion ETF, the SPDR Gold Trust, held at a record 780.23 tonnes on Monday.

Gold is holding (where it is) because of investment demand for gold ETFs, rather than demand from the physical side or as a hedge against the US dollar said Weinberg.

While platinum will track the moves of both gold and the dollar the metal appears steady after breaking out of the previous $780-880 range, said James Moore, an analyst with TheBullionDesk.com.

Spot platinum was quoted at $941/946 an ounce, against $946 late in New York on Monday, while palladium was little changed at $183/188 an ounce from $183.50. Spot silver eased to $10.84/10.92 an ounce from $11.22.—Reuters