LONDON, July 7: Gold dipped back in a slow European market on Monday as pressure from a tumbling euro set off a short flurry of selling of the safe-haven asset, dealers said.

Volumes were thin, with little input from the United States due to a slow start after the July 4 Independence Day holiday.

After edging up in Asian trade to over $351 an ounce, spot gold gave in to the weaker single currency, which dulls the dollar-denominated metal’s attraction as an alternative investment for European investors.

Bullion slipped below support at $350.00 early in European activity, before going on to score a low at $347.65 when limited selling from funds kicked in.

“Gold is looking a bit feeble, I think people are looking to get it down to the 48, 47 and even 45 level — it seems to have retracement written on it today,” one trader said.

Spot gold was trading at $348.55/349.25 an ounce by 1453 GMT, compared with Friday’s London close at $351.00/351.80 and $350.90/351.40 quoted in New York before Thursday’s early close for the Independence Day holiday.

Some participants were positive on bullion later this week due to skepticism over US economic health and analyst expectations for the European Central Bank to leave interest rates unchanged.

This week, attention will also focus on the European Central Bank’s July 10 rate setting meeting, but ECB President Wim Duisenberg has already poured cold water on hopes for further rate cuts after aggressive action over the last two years, which saw rates reach historical lows of 2.0 per cent.

Silver rallied to levels not seen since April at $4.71/4.73 an ounce from $4.67/4.69 quoted in New York late on Thursday, with investors inspired by a strong equities markets.

Spot platinum stood at $671.00/676.00 from $672.50/ 677.50 in New York late Thursday, while spot palladium was at $181.00/186.00, compared with $183.50/188.50.—Reuters