London gold was fixed at $257.00 a troy ounce in the morning, just 20 cents down on last Thursday afternoon's level, with spot prices recovering from weakness overnight in Asia. Spot gold was last higher at $257.80/$258.30 versus Thursday's New York close of $256.40/$256.90.

Bullion dealers expected little news from the day's meeting by the International Monetary Fund (IMF) board to discuss how to sell gold without the negative impact produced by the Bank of England's auction.

Britain has suffered severe criticism for its reserves sales policy from miners and governments in gold-producing countries like South Africa, who say the announcement of sales before the event has damaged the price and threatened mining jobs.

Gold dropped to fresh 20-year lows near $256.00 following Britain's Tuesday auction of 25 tonnes, the startof a programme intended to cut reserves from 715 tonnes to 300 tonnes over the coming years and switch to foreign currencies in its place. Plans for IMF sales of up to 311 tonnes of reserve gold to help poor-country debt relief have also been slammed, making the issue of how to conduct disposals highly sensitive.

Any IMF sales will depend on US Congressional approval as the United States has a voting weight in the international body that gives it a veto over any decision to offload reserves.

Gold lease rates remained high at 2.18 per cent for one-month metal, which dealers attributed variously to market wariness after recent price moves, heavy borrowing by short sellers and miner or central bank activity.

"We have seen some aggressive borrowing over the last few days but I don't think there will be much more of a squeeze. People are short and need to borrow," said a London dealer.

Hong Kong traders said Asia has regained its appetite for gold as economies recovered and currencies strengthened, makinggold priced in US dollars more affordable.

Silver was seen keeping within a $5.15 to $5.30 range with business likely to be choppy and movements reflecting strong activity in options, a dealer said. It was last two cents down on its New York close of $5.22/$5.25. Platinum was up $1.00 at $352.00/$354.00 and palladium was unchanged at $328.00/$333.00.