Thursday's vote by Switzerland's lower house of parliament, which cleared moves towards eventual reserve gold sales, began gold's slide from $294.00.

Gold fell further on Friday's news that Switzerland would hold a referendum in April on the constitutional changes needed for sales to go ahead.

One London dealer said the size of the move, on a vote which was widely expected by the market, could be down to fund short position holders looking to improve end-of-year book values. "The funds are probably marginal shorts, and it could be that they are pressuring the price somewhat in order to get a good year-end profit," he said.

"The market is exceptionally thin this time of year, and this week will be even worse as there will bea certain percentage of dealers and customers on holiday," he added.

Support was likely at $288.00, he said, a level neared during late US business on Friday. "Any break here may well prompt some stop-loss selling, and we could easily see another $3.00 to the downside, but I think we will hold this side of the new year," he added.

One factor likely to further dull trade was the rise in gold lease rates, which ticked up last week amid year-end book squaring and producer forward sales.

A second dealer quoted one-month lease rates at 1.70 per cent late on Friday versus the previous Monday's 1.20 per cent, with one-year metal at 1.50 per cent versus 1.20 per cent.

The market appeared unmoved by weekend news of US president Bill Clinton's impeachment, which dealers said would have little effect unless the dollar gave way.

"Unless the dollar falls to around the 110 level against the yen, gold should stay within a narrow range," said one dealer.

The yen was last at 115.44/5.54 in early Mondaybusiness.