LONDON, Jan 27: Gold slipped more than 1 per cent in Europe on Tuesday as investors took profits after the last session’s gains, with a firmer euro versus the dollar and an uptick in equity markets suggesting risk aversion is easing.

Spot gold dipped to a low of $891.60 an ounce, and was quoted at $894.40/896.40 an ounce at 1026 GMT, against $902.65 late in New York on Monday.

US gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $12.60 an ounce to $896.20.

Gold climbed to its highest in three months on Monday, about the outlook for the financial system.

A Reuters survey of 52 analysts published on Monday showed most expect gold to hold its ground in 2009 despite expected falls in other asset prices, on worries over the global economic outlook and turmoil in the financial markets.

Investment in physically backed products such as exchange-traded funds has been strong in recent weeks as investors seek a safe store of value.

Holdings of New York’s SPDR Gold Trust inched up to a new record for the sixth consecutive session on Monday, and have climbed more than 52 tons since the beginning of the year.

However, gold jewellery demand remains weak, dealers say, and is likely to remain so in key global centres as prices rise.

As the demand for jewellery is very sensitive to price movements, demand for gold from India, Turkey and the Middle East, the main centres of the gold jewellery industry, should continue to weaken, said Commerzbank.

The platinum group metals are also under pressure from gold’s slip.

Both platinum and palladium suffered in recent months from fears over falling demand from carmakers, who account for around half of global consumption.

Platinum edged down to $951.50/961.50 an ounce from $959.59, while palladium eased to $187.50/192.50 an ounce from $190.—Reuters