Gold Prices slipped into London's long Christmas break on Wednesday but held inside a tight range, dropping $5 an ounce at the AM Gold Fix of $836.75 as world stock markets also fell in thin holiday trade.

The London Bullion market – center of the world's wholesale dealing – is now closed until Monday 29th Dec. European stock markets, like New York, close at lunchtime.

Twenty-four hour gold dealing at BullionVault continues as normal.

"Trade's extremely thin in the physical market because of the Christmas and New Year holidays," noted one analyst in Tokyo to Bloomberg earlier.

"Continued fund selling amid thin trading volumes should exacerbate price volatility throughout the day," agrees Manqoba Madinane at Standard Bank.

"No major economic data releases are expected today [so] technical momentum signals could land in the driving seat," he adds, pointing to a possible bounce in the Dollar after last week's sharp retreat in its five-month bounce.

Christmas Day brings a flood of Japanese data, including Consumer Price inflation, Retail Sales and Industrial Production for Nov.

Today the Nikkei stock index slumped 2.4%. Tokyo Gold Futures ticked ¥14 lower to ¥2,440 per gram.

The Yen turned higher from a one-week low vs. the Dollar of ¥91, while the Euro held just shy of $1.40 in the morning London session.

Sterling dipped below $1.47. Crude oil was little changed at $38.50 per barrel.

"Amid the banking collapses and investment fund losses of 2008, holding a high-value asset free from the risk of default only became more attractive," writes BullionVault for The Daily Telegraph. "Not least because wholesale-size Good Delivery gold bars also trade in a deep, liquid and international market based here in London."

Turning to the outlook for Gold in 2009, "Real interest rates have now been slashed well below zero both [in the UK] and in the US," the report goes on, "and it's here you'll find the one common factor between this decade's bull market in gold and the 20-fold rise of the Seventies. Because low returns paid to cash remove the one big disincentive to using gold to store wealth – the fact that it doesn't pay you an income.

"Nor do US dollars today. Can the UK's bank base-rate be far behind?"

You can read BullionVault's exclusive analysis for The Telegraph here.