Spot gold prices jumped $5 ahead of the Wall Street opening on Tuesday as turnover and volatility picked up following the long Memorial holiday weekend.
Trading above $660 per ounce, spot gold prices had traded overnight in Asia in a very tight range either side of $656.
On the currency exchanges the Euro also hit fresh volatility, gaining more than one cent from its own seven-week low to hit $1.3520.
"The Dollar continues to drive gold prices," said Akira Doi, a director at Daiichi Commodities in Tokyo, to Reuters earlier.
"But I feel that the gold market has largely completed its downside correction after the recent falls."
That dip in the US Dollar kept the Sterling price of gold only a little more than £1 above Friday's European close, rising to £332 per ounce.
For French and German gold investors, spot gold priced in Euros whipped 0.5% around €488 per ounce.
Overnight in Tokyo, gold futures for delivery in April '08 ended the day ¥7 lower per gram at the equivalent of $662.69 per ounce.
The move came as the Yen bounced from a fresh three-month low versus the US Dollar, driven by mixed economic news.
Japanese retail sales fell 0.6% in April from the same month last year – the seventh drop running.
But unemployment declined slightly, while overall household spending rose for the fourth month in a row.
Japanese bond yields rose on the news, while the Ministry of Finance in Tokyo set a 1% coupon on its new issue of two-year bonds – the highest rate paid on two-year JGBs since June 1997.
(What has a decade of zero interest rates done to the Yen – and to gold? Keep reading here...)
Back in the bullion market, investors still waiting to buy gold bullion should note that "$650 continues to be solid support," says Doi at Daiichi.
Professional traders are now watching for US consumer confidence data at 10:00am New York time, followed by the latest Federal Reserve minutes at 14:00 tomorrow.
Any sign that the Fed may keep US interest rates on hold – or might even be tempted to cut them to counter the slump in the US housing market – and the Dollar is likely to fall further versus both gold and the Euro. (Find out why here...)
The gold market will also be looking closely at Thursday's revision of the GDP growth figures for Jan. to March. They're followed by the latest payroll data on Friday.
Along with gold, the Dollar has now pushed the Euro back to a seven-week low in the currency markets.
Mizuho Corporate Bank in Tokyo forecasts a fresh drop in the Euro to $1.3350 after hedge funds and other large speculators cut their bullish bets on the single currency by one-fifth last week – the biggest drop in long-Euro positions since Feb.
And thanks to traders buying back their "Dollar shorts" since mid-May, the Euro has now dropped 1.2% in the last two weeks. Gold has dropped 2.1% of its Dollar value.
"The Euro adjustment is still running its course," reckons Michiyoshi Kato, the Mizuho analyst.
"After reaching $1.36, it's facing a downward correction."
But just as the Euro is being talked down from a near-record top against the Dollar, so gold appears to look "weak" to many analysts – despite recording all-time highs against several of the world's major currencies already this year!
To find out just how strong the long-term bull market in gold is proving, click here and read on...