U.S. dollar prices to buy gold hovered around $1575 per ounce Wednesday morning in London, in line with last week’s close, as dealers in Asia reported an increase in demand for physical bullion, in contrast with exchange traded funds, which have continued to see selling, in what one analyst calls a “tug of war” between physical buying and ETF selling.

“Short-term, gold should drift lower to the short-term support line at $1569/65 or even to the previous low at $1555,” say technical analysts at Societe Generale. “Initial support is at 1564.88,” adds UBS.

Gold in Sterling hovered just below £1045 an ounce for most of this morning, slightly down on the week, while gold in Euros stayed below €1210 an ounce.

Silver meantime hovered around $28.70 an ounce, very slightly up on the week, while other commodities were similarly flat. Stock markets extended yesterday’s gains, in contrast with major government bond prices which fell.

“We remain somewhat cautious on gold and silver,” says INTL FCStone analyst Ed Meir. “They could be hit by a downward reversal if and when markets start to decouple from the surging equity markets.”

Stock markets in Europe extended yesterday’s gains this morning after several major indices closed at multi-year highs Tuesday.

In London, the FTSE 100 posted its highest close since January 2008 yesterday, while over in the US the Dow saw a new all-time record close and the S&P 500 closed at its highest level since October 31 2007, less than 2% off its all-time record close set earlier that month.

Yesterday saw the release of service sector purchasing managers’ index data for a number of economies, which indicated better-than-expected conditions in the US, UK and Eurozone.

“Looking forward,” says a note from Credit Agricole, “[stock market] sentiment could get further support from data this week as the [Federal Reserve’s] Beige Book today will probably show that employment continued to grow ahead of Friday’s jobs report.”

The latest US nonfarm payrolls figure and unemployment rate are due to be published this Friday. The consensus forecast among analysts is for an addition of 160,000 jobs last month, with the unemployment rate expected to stay at 7.9%.

Later today, the privately-produced ADP Employment report is due to be released at 08.15 EST.

Outflows from the world’s biggest gold exchange traded fund, the SPDR Gold Trust (ticker: GLD), continued yesterday for the eleventh day running, taking the total volume of gold held to back GLD shares to its lowest level since November 2011.

“It is really a tug of war between ETF selling and physical buying right now,” says Yuichi Ikemizu, head of commodity trading, Japan, at Standard Bank. “We have seen quite good physical demand from China and Southeast Asia, but the ETF selling has put a lid on gold prices.”

In China, the most popular forward contract on the Shanghai Gold Exchange continued to trade at a premium of around $20 an ounce compared to the international wholesale gold price Wednesday.

“We are seeing strong and growing support for gold from the physical market,” say Standard Bank commodity strategist Marc Ground, “as evidenced by our Standard Bank Gold Physical Flow Index, which places a floor at around $1560 an ounce.”

“If the buying from China, Indonesia and Thailand continues, it will not be very easy to get physical supply,” one dealer in Singapore told newswire Reuters this morning.

South Korea’s central bank bought 20 tonnes of gold last month, taking its total gold reserve to 104.4 tonnes, 1.5% of overall reserves, it said in a statement.

“As the gold purchase aims to diversify the foreign exchange portfolio over the long haul, gold prices’ short-term volatility have not been considered,” said Lee Jung, head of the Bank of Korea’s investment strategy team.

February also Russia and Kazakhstan continue to buy gold.