Gold prices fell in Europe on Wednesday and the market struggled to stay above key support at $390.00 an ounce as the dollar struck its highest level so far this year against the euro.
"Gold has been pretty stable this afternoon but the market is a bit softer on the currencies, we could be looking at a test down toward $388.00 at some point...but it should bounce back quite easily," one dealer said.
After dropping sharply towards support at $6.50 earlier, silver perked up, with dealers attributing the market's jump to speculators buying silver on a hunch that it would outperform gold.
Spot gold stood at $390.95/391.65 an ounce by 1528 GMT after dipping below $390.00 to a low of $389.25. That compared with New York's last quoted level on Tuesday of $392.95/393.45.
The dollar maintained its recent bull run on expectations of a pick-up in the long-dormant US jobs market. The dollar was last at $1.2149/53 against the euro after touching a high of $1.2105.
A jump in the employment component of Monday's US Institute of Supply Management report bolstered expectations of a strong reading in Friday's non-farm payrolls.
A stronger US currency dims dollar-denominated gold's appeal for holders of other currencies such as the euro and the yen.
Gold has moved broadly with the dollar's movements against other currencies, particularly the euro. Bullion surged to a 15-year high at $430.50 in early January as the euro struck a new high against the dollar.
Dealers were also keenly awaiting Thursday's European Central Bank rate setting meeting.
Analysts also said that a pact limiting official gold sales may be renewed ahead of its September expiry, with an announcement possibly coming this week after the ECB board meeting.
Platinum inched higher, with the market quoted at $882.00/887.00, versus $873/878 in New York.
The metal, used in jewellery and automobile catalytic converters, hit a fresh 24-year high in Asian trade on Tuesday at $903 an ounce - fuelled by speculative demand.
Silver rose quickly after dropping as low as $6.52. It was last traded at $6.68/6.70 an ounce, down from $6.71/6.73 in New York on Tuesday and compared with the new six-year peak at $6.99 reached earlier this week.
Analysts said silver was hard to call, with influences coming from its precious and industrial metal fundamentals.
Palladium firmed slightly to $238.00/243.00, compared with $237.50/243.50 previously.