Gold firmed in Europe on Monday after bomb blasts in Turkey and Iraq heightened security fears, enhancing the precious metal's safe-haven status and causing the dollar to tumble across the board.
But although sentiment in the market was improved after heavy selling since the start of April, traders said gold would find it difficult to break out of its $370-$385 range unless the dollar fell further.
By 1529 GMT, spot gold had fallen away from its early move above $380, and was quoted at $378.40/379.20 a troy ounce, still up on New York's Friday close at $376.70/377.45 an ounce. It peaked in earlier trade at $383.30.
"It is really following the currency moves, but it feels quite steady I have to say," one trader said. "If we get a pick up in the euro again, I think it (gold) will be bid up again quite quickly."
Following on from the bomb explosions in Turkey on Sunday just hours before British Prime Minister Tony Blair was due to arrive in the country, the head of Iraq's US-appointed Governing Council was killed by a car bomb at a checkpoint in Baghdad.
The euro took advantage of the dollar's distress, rising to a 10-day high of $1.2060, making dollar-denominated gold relatively cheaper for holders of the currency.
Spot gold also took heart from another sizeable fall in speculative interest on the New York gold futures market where the net long position was now at its lowest since July 2003.
Traders were looking for gold to form a base above its recent seven-month low at $371 in the short term.
Silver was virtually unchanged at $5.72/5.76 from $5.71/5.75.
Platinum group metals (PGM) firmed as the annual industry meet in London kicked off on Monday.
Platinum attracted buying in Japan ahead of the release of UK-based refiner Johnson Matthey's (JM) outlook for the PGMs, finally managing to punch back through resistance at $800 an ounce - a level where it failed twice last week - to reach its highest since May 5.
Spot was quoted at $815.00/820.00 an ounce, just off a peak of $818 and up from New York's $790.50/795.50.
Palladium initially took heart from platinum's firmer tone and rose as high as $249.00, before paring gains and falling back to negative territory at $238.00/243.00 from $238.50/244.50.