LONDON, Mar 23 (Reuters) Precious metals eased in Europe on Thursday after substantial gains in recent sessions, with gold looking to currencies for direction and with silver pausing after hitting 22-year highs.
Prices came under pressure as investors booked profits and the dollar strengthened against the euro.
Dealers said they awaited next week's Federal Reserve meeting that might provide clues about the dollar's future movements.
''Gold is still consolidating and waiting for some impetus to drive prices higher. The next week is going to be an important week,'' said Michael Widmer, analyst at Macquarie Bank Ltd.
Spot gold was quoted at $548.00/548.90 an ounce by 1055 GMT (1625 IST), versus $550.20/551.10 late in New York on Wednesday.
The U.S. central bank was seen lifting interest rates to 4.75 per cent from 4.5 per cent on Tuesday, but dealers said the big question was whether it would raise rates to 5 per cent or higher at meetings in May and June.
Rising rates tend to boost the dollar and diminish gold's allure as an alternative investment. The dollar rose to a one-week high against the euro on Thursday.
''The absence of bullish news and continued view that the Fed will raise U.S. interest rates next week looks set to pressure gold back towards $535 in the coming sessions, potentially offering physical traders a good buying opportunity,'' James Moore, analyst at TheBullionDesk.com, said in a daily note.
High prices had failed to deter jewellery buyers in key markets such as India and China, said Albert Cheng, managing director, Far East, for the industry-backed World Gold Council.
Jewellery demand fell in parts of Asia in the last quarter of 2005 due to high prices, but consumers had now adjusted to the firmer market, he told Reuters.
''Overall, gold has been lacklustre and disappointing recently, seemingly biding its time as it waited for fresh developments to provide the impetus to break the current $540-$560,'' Standard Bank said in a report.
Gold rose to a 25-year peak of nearly $575 in February as investors diversified into commodities on tension in the Middle East, firm oil and uncertainty about the dollar's outlook.
Dealers said gold was likely to trade in a familiar $547 to $557 range ahead of the Fed meeting.
SILVER OFF HIGHS Silver inched lower after a rally to a 22-year high of $10.59 an ounce, hit on Wednesday, lost momentum.
Spot silver fell as low as $10.42 before moving to $10.46/10.49, still down from 10.48/10.51 late in New York.
Silver spiked on news the U.S. Securities and Exchange Commission had approved rule changes allowing the American Stock Exchange to list shares in Barclays Plc's iShares Silver Trust, which is designed to track the silver price.
Gains were capped by resistance at $10.60, but dealers expected the metal eventually to test the $11 area, with the silver-backed security likely to attract new investment and boost demand.
Platinum fell to $1,036/1,040 from $1,042/1,046 an ounce in New York, while palladium edged down to $312/317 an ounce from $321.50/325.50.
REUTERS SD PM1731