Gold was steady near 890 usd per ounce as equity markets rebounded but sentiment was still fragile in the wake of the Federal Reserve's emergency 75 point rate cut yesterday.

Yesterday, bullion traded in a wide range from as low as 849.30 usd to a high of 894.45 usd as some investors sold the metal off in a bid to raise cash to cope with widespread equity market losses while others bought gold as a safe store of value.

'The movement of gold is likely to depend more on the development of stock markets over the next couple of days,' said Peter Fertig, Dresdner Kleinwort analyst.

The US Federal Reserve yesterday unexpectedly slashed a key interest rate by a bold three-quarters of a percentage point to 3.5 pct, which made for the first emergency cut since 9/11, responding to a global plunge in stock markets that heightened concerns about a recession.

The US central bank also signalled that further rate cuts were likely.

Equity markets in London and Europe were steadier this morning having seen a volatile session amid global panic yesterday.

The dollar this morning was off lows seen yesterday, which limited a move up for gold.

Gold moves in the opposite direction to the dollar as it is seen as an alternative asset and in line with oil prices as the metal acts as an inflation hedge. Oil was slightly lower this morning, near 89 usd per barrel.

'Short-term, rallies in gold may run into further pockets of profit taking however with interest rates in decline, gold is likely to see further investor inflows as traders seek assets offering both safe-haven qualities and strong returns,' said TheBullionDesk.Com analyst James Moore.

At 9.17 am, spot gold was trading at 890.30 usd per ounce, against 890 usd usd in late New York trade yesterday.

In other precious metals, silver was up at 16.07 usd per ounce against 16.04 usd.

'Silver looks set to benefit from the same form of safe-haven seeking investment demand as gold in the coming sessions, and in addition investors may favour the metal as a cheaper way to gains leverage in the market compared with gold and platinum,' said Moore at TheBullionDesk.Com.

Platinum was up at 1,548 usd per ounce against 1,551 usd. Palladium was down at 364 usd per ounce from 367 usd.