Gold - While the dollar still remained the driving force behind any moves in the gold price, dealers said position-squaring would add momentum to the market and lift the price higher. "We think that the potential for forward covering is greater today and we will see a move to $275," said Frederic Panizzutti of MKS Finance in Geneva.

"But there's not really any potential beyond that level at this stage." Bullion prices were not expected to react to news from the Swiss National Bank that it had sold 85 tonnes of bullion by mid-August and planned to sell a further 200 tonnes next year as part of its programme to sell off excess bullion reserves. "Its pretty much in line with what the market expected," said one European trader. At 0640 GMT spot gold was quoted at $273.20/$273.70, up from Thursday's New York close. Silver - After recent losses on the back of hefty fund selling, silver was seen reversing direction and firming towards $4.90, though that was seen as a hard level to break.

"The market still has questions as to what's going on, so it will be hard for people to build up long positions," said one dealer. Silver's latest losses were sparked largely by talk of offloading by the Chinese government and US investor Warren Buffett, though no confirmation of either has yet emerged. At 0640 GMT spot silver was quoted at $4.85/$.87, up two cents from New York's Thursday close.

Platinum - Traders were still waiting for Russian deliveries of both platinum and palladium, so prices were expected to hold around current levels until the situation changed. Spot platinum was last at $572.00/$580.00, almost unchanged from the New York close, while palladium was $2 down at $713.00/$728.00 ahead of sales from the US stockpile due on August 28. Markets are closed in the UK on Monday, Aug 28, for a national holiday, although they remain open in other European centres.