Comex gold eased in a muted reaction to widely anticipated news that Europe's central banks will renew for another five years am important gold sales agreement expiring in September.
But silver spiked to a six-year peak and palladium hit its highest in more than a year as speculators prowled for precious metals to buy while gold languished.
April gold settled off 70 cents at $400.90 an ounce, in a narrow $401.70 to $398.80 range. It retained support from Friday's $8.40 rally on the back of data showing anaemic job creation despite strong economic growth.
Spot gold closed at $400.45/5.15, off from Friday's close at $400.90/1.90. London bullion dealers fixed the afternoon reference price at $399.85.
The market had been expecting the central bank deal for months. It raised the limits on total annual gold sales to 500 tonnes from 400 tonnes in the original pact, which, in contrast, surprised the market when it was announced in September 1999, sending prices skyrocketing.
"It's neutral on the basis that it's out of the way. It's not going to overhang the market," said a New York bullion trader. "It's slightly bearish on the point that they chose the higher end of the range of what people were expecting."
The deal, announced on the sidelines of a meeting of central bankers from the Group of 10 top industrialised nations, goes into effect in September.
It keeps limits on central bank lending of gold, which was the source of liquidity for the short selling and producer hedging that pushed gold prices to 20-year lows in 1999 before the first agreement was announced in Washington D.C.
"If anything, though, it is a reaffirmation that most of the major central banks have got gold lending constraint," said James Steel, commodities analyst at Refco.
"It's still a net mild plus even though the market is down today."
The joint statement said, "Gold will remain an important element of global monetary reserves."
Central banks have for years been reducing the size of their gold stockpiles, which once were the backbone of the global monetary system.
Gold's role as a store of value lost favour as the euro replaced Europe's old national currencies and reserve diversification into the dollar, euro and yen became the norm.
Before the renewal, the Bundesbank, the world's second largest holder of central bank gold, said it had requested an option to sell 600 tonnes.
The Swiss National Bank said it would not dispose of more than 130 tonnes, as it completes a gradual 1,300-tonne halving of its reserves that has been underway for several years.
"It was quiet all day. Then the locals get together and they run it." May silver closed flat at $6.99 an ounce, up from a low at $6.89.
The last time silver was at these a level was just after billionaire investor Warren Buffett bought 130 million ounces, which he is still thought to possess.
Spot silver closed at $6.96/98, up from the close at $6.95/98 on Friday. London's fix was at $6.92. April platinum rose $7 to $895.00 an ounce.
Spot was quoted $892.00/897.00. June palladium jumped $14.10 to $267.00 an ounce, trading at the highest for the active contract since February 2003. Spot was indicated at $259.50/265.50.
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