LONDON, June 9: Gold dipped slightly in subdued European trade on Monday, with the market at the lower end of familiar ranges as tentative hopes for a US economic recovery kept the dollar broadly steady against the euro.

Better-than-expected US jobs data released took gold down sharply in Europe on Friday as the precious metal looked less attractive for holders of other currencies.

Volumes on Monday were thinned by a public holiday in most of Europe, while Australian markets were also closed.

Gold is still in its overall $358-368 range and more recently has been at $362/67 and doesn’t seem to want to break out of either end of that for the time being, said Simon Weeks, bullion director with Scotiamoccata.

Spot gold has been fluctuating in its current range for almost two weeks, taking its cue from the dollar’s changing fortunes against the euro. It hit 15-week peaks a fortnight ago when the European single currency touched lifetime highs.

Signs that central banks are declaring war on deflation also thrust gold into the spotlight last week as hints of a preference for mild inflation reminded investors of the metal’s reputation as a safe store of value. The euro gained slightly against the dollar on Monday after the British Treasury said the pound would have to fall further before Britain could exchange it for the euro, but traders said the market had largely factored in the UK stance.

Friday’s Commitment of Traders’ data showed that speculative exposure to gold has reached its longest position since 1983, suggesting a growing risk of large scale liquidation.

But analysts said the current low interest rates in Europe and the United States made immediate liquidation unlikely.

Obviously it is a little bit concerning that the market is probably a little bit one-sided and you’re not going to have as much physical offtake during the summer months, Weeks said.

Spot silver was slightly off at $4.52/4.54 an ounce, from late New York levels on Friday at $4.53/55 an ounce.—Reuters