Comex gold futures closed with a more secure footing above $400 an ounce on Monday, boosted by views in the market that a struggling US dollar should continue to support the precious metal, traders said.
Benchmark April gold climbed $3.20 to end at $407.40 an ounce, trading from $403 to $408.40, and extending a recovery from last week's more than two-month low at $395.
A Group of Seven warning after a weekend meeting in Florida that produced no agreement on restraining the dollar's fall helped boost gold in quiet trading, dealers said.
The dollar briefly hit a two-week low against the euro on Monday, as markets saw the G7 comments against "excess volatility" in exchange rates as not signalling an imminent, co-ordinated dollar buying intervention.
By mid-afternoon, the euro weakened to $1.2680 from a high at $1.2761, hit by a report saying EU finance ministers will discuss "all possible ways" to curb euro gains, raising prospect of dollar buying.
"I think the gold market is taking that longer-term view that's saying 'we recognise the day-to-day fluctuations in the euro, but our expectation is that it will come back in line with our projection of future dollar weakness,'" Hunter said.
The euro is down more than 2 cents from the lifetime high at $1.2898 on January 12.
April gold hit a 15-year high at $432.30 in January as the euro was breaking records almost daily.
Final estimated Comex gold volume touched 30,000 lots, less than half of Friday's tally at 66,171 contracts.
Open interest rose 3,852 to 233,282 lots. The fund long position in Comex gold was lower in the latest week, CFTC Commitments of Traders data showed.
A report on Friday said fund net long positions fell to 67,564 contracts as of February 3 from 86,056 contracts as of January 27.
IFR Pegasus analyst Tim Evans said, referring to the data, that long liquidation selling through last week put the gold market in a more balanced stance.
Evans pegged resistance in April gold futures at $410.20, $416, and the $430.40-432.30 area, with support at $395, $392, $388.50 and $379.
Spot gold last changed hands at $406.25/7.00, versus $402.80/3.80 at Friday's New York close. London's late fix was at $405.95.
Drawing on gold's strength, Comex March silver jumped 15.0 cents to $6.428 an ounce, in a $6.245-$6.44 session range. Spot was at $6.40/42 from $6.25/27 previously.
The fix was at $6.345. Nymex April platinum settled $6 higher at $832.70 an ounce. Spot was at $831.50/836.50. March palladium rose $1.05 to $242.60. Spot ended at $233.50.00/239.50.