Gold fell around $1 an ounce in Asia on Monday as growing speculation of an imminent hike in US interest rates fuelled gains in the dollar, dealers said.
Gold traded at $383.30/383.80, down from $384.70/385.50 last quoted in London. The New York market was closed on Friday for a national day of mourning for former President Ronald Reagan.
Trading was also thin in Asia with Australian players on a holiday weekend. In Tokyo gold futures, the benchmark April contract rose four yen per gram to 1,367 yen per gram. "We may see a wider trading range in Europe. Activity is very slow here because the Australians are not in the market," said one dealer in Hong Kong.
The dollar hit a three-week high against the euro on speculation the US Federal Reserve could raise interest rates more quickly than the market expects if inflation speeds up.
The single currency was below the psychologically key $1.20 mark at around $1.1972 after falling to a three-week low of $1.1954. A stronger dollar makes dollar-priced gold more expensive for holders of other currencies.
The Fed is widely expected to raise rates by 25 basis points at its next policy meeting on June 29-30, from a 46-year low of 1 percent.
Dealers said the market would focus US economic data this week, including retail sales and consumer price index numbers, for more clues on a possible interest rate rise.
A rise in US interest rates would mark dollar-denominated assets more attractive, which would boost demand for dollars. Some bullion dealers said gold's failure to return to the $400 an ounce territory had made it prone to heavy liquidation.
The market could fall to $370, a level last seen in October, if the key $380 an ounce support was broken, they said.
"I think most of my costume's just wait and see," said Beth His Wash, a dealer at United Overseas Bank in Singapore.
"I think they expect gold price to come down further," she said. In other precious metals, platinum was quoted at $790/795 an ounce, down from $792/797 in London. The metal regained $800 on Friday but buying interest evaporated quickly.
Palladium was unchanged at $215/220 an ounce. Silver was at $5.67/5.69 an ounce, compared with $5.69/5.71.