LONDON, Jan 6: Gold rebounded in Europe on Friday after dipping in Asian trade, with players looking to currency markets for direction, dealers said.

Prices were expected to remain volatile in the near term as investors were tempted to book profits, but new buyers were coming in to lift the market.

It’s vulnerable to a pullback, but on the positive side it’s gaining momentum, said Georges Lequime, precious metals analyst at RBC Capital Markets.

We are surprised to see the buying that is taking place on the dips, he said.

Spot gold was quoted at $528.00/528.75 an ounce by 1137 GMT, recovering from $523 in earlier sessions. It closed at $525.90/526.70 late in New York on Thursday.

The market has been choppy this week. Gold fell 2.3 per cent on Thursday on investor profit-taking prompted by three-week highs and has been hovering below last months near-25-year high of $540.90.

Dealers await the outcome of US non-farm payroll data, which are expected to show around 200,000 new jobs were created in December, compared with 215,000 in November. The figures might move the dollar and so gold.

Gold will only react if the number is away from expectations, said Stephen Briggs, economist at SG Corporate and Investment Banking.

Gold was generally on the defensive in Asia, with futures on the Tokyo Commodity Exchange falling about 1.5 per cent as selling pressure increased following the key December contract’s fall below the closely watched 2,000 yen level.

Some investors were eager to buy gold on dips as there were plenty of bullish factors, including the weakness of the dollar, strong oil prices and continued worries about economic growth.

In other precious metals, platinum rose to $987/991 an ounce from $985/989 in New York. Palladium was unchanged at $260/264.

Silver was up at $8.82/8.85 an ounce from $8.79/8.82 late in New York.—Reuters