Gold dipped to a fresh six-week low in Europe on Friday as the euro's brief respite was curbed by an unexpectedly strong manufacturing report for New York that underscored economic strength in the world's biggest economy.
Dealers said sentiment was tending weaker, with further falls seen possible in coming sessions.
Spot gold stood at $418.60/419.30 per troy ounce by 1444 GMT from $419.70/420.40 late in New York on Thursday. Prices earlier skidded to a six-week low $417.90.
"If the dollar continues to strengthen then there's every chance that gold could drift down to $415, but it will probably bounce from there," one dealer said.
The dollar gained, making gold less affordable for non-US investors, after the upbeat New York manufacturing report joined other strong data to convince many that the Fed would push its funds rate to around 4 percent by year-end, a move which would boost dollar demand and dent that of gold.
The euro was last at $1.2051.
"After the recent sell-off in gold we are no longer as concerned as we were about the extent of speculative positioning, although for choice we suspect that the short-term outlook for gold is for lower rather than higher prices," UBS Investment Bank analyst John Reade said in a daily report.
He added, however, that any further weakness would present longer-term investors with good buying opportunities.
In other metals, silver was holding fairly steady at $6.96/6.99 from $6.95/6.98 in New York on Thursday.
Platinum dipped to $862.00/866.00 from $865.00/869.00 previously, while palladium stood at $180.00/184.00 from $181.00/185.00.
"The narrow $860/870 and wider $850/880 ranges seem likely to continue as we head into the summer," Dresdner Kleinwort Wasserstein said in a daily report.