LONDON, Oct 25: Europe gold edged higher on Tuesday, lifted by a weak dollar against the euro, with players looking for a clearer direction to the market, dealers said.

The precious metal had largely traded above $460 an ounce in the past four weeks despite heavy fund positions and a drop in crude oil prices, indicating potential for further gains in the long run, they said.

Spot gold was at $467.50/468.30 up from $465.00/465.70 in the US market late on Monday.

It is more than nine per cent higher from a year ago but below the recent near-18-year high of $480.25.

Gold is certainly looking a lot stronger this morning, said Paul Merrick, vice-president of commodities at RBC Capital Markets. Gold is+ just moving up with the currencies.

Gold had three big spikes up in the last month and a half. It has taken a breather and it could be ready for the next one up, he said.

The euro was higher than New York levels at around $1.2031.

Traders said gold faced resistance at around $470 and was expected to be range-bound on Tuesday.

Analysts in Europe said physical demand had been supporting the metal, but traders in India, the world’s largest gold consumer, said festival season buying was dull because of volatile and high prices.

Gold imports into the country had fallen during the season, which peaks in early November with Diwali, the Hindu festival of lights.

India imports about two-thirds of its annual gold demand of more than 800 tons.

Technical analysts said the metal could target $500 an ounce in the coming months and even $550 in the long term as worries about inflation and the US economy and geo-political concerns persisted.

People invest in safe-haven gold in difficult times.

The metal also rises with a weakness in the US currency as dollar-priced gold becomes cheaper for those holding other currencies.

In other precious metals, silver was at $7.70/7.73 an ounce, up from $7.64/7.67 last quoted in New York.

Dealers said the industrial metal could remain volatile, with direction coming from gold, copper and oil markets.

London Metal Exchange three-month copper futures surged to a record high of $4,018 per ton last week.

Spot platinum was at $932/936 versus $926/929, while palladium was at $208/212, compared with $207/211. —Reuters