Gold prices fell Monday on tentative optimism the sovereign debts of Italy and Greece can be managed without crashing Europe's banking system.
Asian stocks gained but European fell, in some cases more than one percent, as investors awaited results of a crucial auction Monday of Italian bonds.
The interest rate required for Rome's auction of five-year notes is being closely watched and could either extend Friday's upbeat sentiment or reverse the mood.
As a new week begins, risk sentiment has continued to improve on the back of positive developments out of Europe, with the new Greek government being sworn in and (Italian Prime Minister) Silvio Berlusconi's resignation over the weekend lifting investors' spirits, UBS strategist Edel Tully wrote in a note.
That market conditions were very thin on Friday, with some participants out for the Veterans' Day holiday in the U.S., probably helped make gold's sweep higher a bit easier. The same applies so far today with limited flows overnight in Asia carrying over into early European trading.
The euro was falling against the dollar, which was up 0.6 against a basket of major currencies.
Although the greenback was rising, futures for the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 were mixed.
Gold for December delivery fell $9.50 to $1,778.60, while gold for immediate delivery fell $17.75 to $1,778.48.
Silver for December delivery was off 44 cents to $34.25, while silver for immediate delivery slipped 56 cents to $34.26.