LONDON, Aug 23: Gold inched higher in Europe on Tuesday, flirting with the $440.00 an ounce level as the dollar softened against the euro, although sentiment was tempered by the implications of current major speculative longs.

Traders said there is the potential for a sharp sell-off, if US futures longs liquidate — non-commercial net longs on COMEX stand at a record 157,607 lots.

Standard Bank London said in a report that while continued buying could be interpreted as supportive of the market, it could also potentially mean a sharp move to the downside when the investment funds have a change of heart.

Gold is OK here — around $440.00 — but it looks as if it will be tougher to get up to $445.00, a European trader said.

Spot gold rose to $439.70/ 440.50 an ounce by 1004 GMT, up from New York’s late Monday quote of $437.70/ 438.50.—Reuters