Gold moved down in Europe on Tuesday as a jump in US consumer confidence boosted the dollar and dulled the metal as an alternative investment. Spot gold eased to $387.80/388.30 per troy ounce by 1423 GMT, compared with $390.25/$391.00 quoted late in New York on Monday.
The dollar picked up speed against the euro after data showed a marked improvement in US consumer sentiment, suggesting the economy may have picked up in July after a soft patch in June.
The euro was at $1.2099 against the dollar after hitting a peak for the day of $1.2181 earlier - which boosted gold to $393.50 - on a reported security scare on a United Airlines flight from Sydney.
A stronger dollar makes gold more expensive for non-US investors.
European dealers said that gold was struggling to shake off weak sentiment after the market lost almost five percent last week from levels over $400 an ounce.
"There is a lack of interest to establish long positions, especially with August coming up when there will be no physical demand so people are looking to the downside," one dealer said, putting support around $385.00.
The consumer confidence numbers kicked off a key data period in the US that could determine whether markets buy into the economic optimism that Federal Reserve Chairman Greenspan expressed last week.
US durable goods data follows on Wednesday and gross domestic product numbers are due on Friday.
Analysts said that sentiment was pointing south for bullion, unless the dollar weakened significantly.
"I think we will begin to see an extension of the downside. Consumer confidence figures from the US will give the market direction short-term, but with a whole host of data from the US this week, trade is likely to remain volatile," James Moore of TheBullionDesk.com said in a daily report.
Silver fell to $6.16/6.21, compared with $6.20/6.23 in New York on Monday.
Platinum dipped to $807.00/812.00, compared with $816.00/821.00 in New York. Palladium was flat at $217.00/222.00.