Platinum and palladium were little changed from London's last quoted levels, while silver was down, tracking gold's decline.

Gold gained nearly 6 percent in 2004, and dealers expected the metal to rise further this year as violence in Iraq, high oil prices and the dollar's poor outlook raise gold's safe-haven appeal.

Spot gold fell to a three-week low at $432.90 an ounce before rebounding to $434.25/435.25 in afternoon trade. That compared with $438.15/438.45 last quoted in London on Friday, when the New York market was closed for the year-end holiday.

Tokyo's gold futures reopen on Tuesday after a long New Year's holiday.

Physical trading was quiet, with jewellery manufacturers and investors showing little interest in the metal despite falling prices.

In the currency market, the euro was at $1.3441, versus around $1.3558 in late US trade and off Thursday's record high at $1.3667.

A firmer dollar makes dollar-priced gold more expensive for holders of other currencies.

But currency dealers said the euro was expected to continue to firm this year on concerns about whether the United States can attract enough foreign capital to finance its massive current account deficit.

Dollar weakness has been the dominant factor behind gold's three-year run higher, with the metal's price reaching a 16-1/2 year high at $456.75 an ounce in early December. Some dealers said expectations that last week's devastating tsunamis would ignite heavy safe-haven buying in Asia had failed to materialise.

Gold is often bought as an investment that can be sold in times of trouble.