LONDON, June 18: Gold was little changed in Europe on Wednesday as oil prices flattened and currency markets stabilised, with traders looking to the dollar to set fresh direction for the precious metal.

Gold was trading at $883.30/884.30 an ounce from $884.20/885.40 late in New York on Tuesday, when the metal reversed early losses and firmed on a weaker dollar.

The dollar steadied against the euro Wednesday after recent speculation over interest rates, but remained on the defensive as hopes for a hike in US rates eased after a spate of poor economic data.

Gold tends to track crude prices, both because it is bought as a hedge against inflation and because it is often traded in a basket of commodities, of which oil can be the most heavily weighted.

The precious metal benefited as crude soared to a new all-time high of $139.89 earlier this week.

Traders will be eyeing stock data due from the US later Wednesday, which can cause sharp fluctuations in the oil price, and the outcome of a meeting of oil producers and consumers in Jeddah this weekend.

A run-up in oil prices could lend further support to gold, which remains firmly supported by fears over inflation as energy and food prices continue to surge.

Demand from institutional investors appears resilient.

Gold ETFs issue securities backed by physical stocks of the precious metal which can be traded on exchanges, allowing investors to gain exposure to metals prices without holding the metal itself.

The growth of their holdings has represented a key source of demand for gold since the launch of the first precious metals ETF in 2003.

Gold jewellery buying is lacklustre, however, with buyers put off by the high and volatile prices of recent months. The summer months are typically a sluggish time for gold. Spot platinum rose to $2,071.50/2,091.50 an ounce from $2,052.00/2,072.00 late in New York.

Spot palladium rose to $458.00/466.00 an ounce from $456.50/464.50. It hit a high of $464 an ounce, matching the level hit on Tuesday, its strongest since mid-April.

Silver was steady at $17.03/17.08 an ounce from $17.05/17.13.—Reuters