Gold was marginally higher in Europe on Monday, supported by a firmer euro against the dollar after a fall of almost five percent to its lowest in over a month last week, dealers said.
Spot gold was at $390.60/391.10 per troy ounce by 1402 GMT, compared with $389.70/390.20 in New York late on Friday.
Bullion dropped around $18 last week to a low of $387.55 as an upbeat assessment of the US economy from Federal Reserve Chairman Alan Greenspan boosted the dollar to three-week peaks against the euro and ate away at bullion's appeal to investors.
Dealers said the market would make slim headway as the euro steadied, but any major move higher would need a sizeable drop the dollar.
"A backlash in the euro would bring new support to the metal. However, for the gold price we need a move towards $400 to slow down the bearish momentum, and prices around $410 to turn around the downtrend," Alexander Zumpfe of Dresdner Kleinwort Wasserstein said in a daily report.
The dollar slipped from last week's three-week highs against the euro as the market waited to see if data due out this week would support Greenspan's recent optimism on the US economy.
US consumer confidence on Tuesday, durable goods on Wednesday and gross domestic product on Friday will be key tests for the dollar after Greenspan said last week that recent weaknesses in the economy were transitory, indicating interest rates still needed to go higher.
Barclays Capital said in a daily report that gold had suffered the most from a strengthening dollar, but the US currency could be ready to fall again.
Silver drifted down to $6.26/6.29, compared with $6.30/6.33 in New York. Dealers said the market was likely to follow the same pattern as gold, making modest rises later this week, with resistance pegged at $6.42.
Platinum fell to $813.00/818.00 from $816.00/821.00, steadily moving away from a six-week high of $836 an ounce hit on July 20 because of the absence of buying interest. Palladium was at $215.00/222.00, down from $218.00/223.00.