Gold was last quoted at $255.35/$255.75 a troy ounce against the previous New York close at $255.70/$256.20.

Dealers and analysts said gold remained range-bound and is likely to consolidate at current levels.

``Physical support remains solid at lower levels but the market continues to encounter producer selling, albeit light, and looks firmly entrenched in the $250-60 range,'' metals analyst, T Hoare Canacord, at Rhona O'Connell said in a report.

London dealers said gold remained very quiet in early trading, moving in a 50 cents range.

A Reuters poll of analysts found that gold prices will remain at levels not seen in two decades for the second half of 1999, averaging at $257.70 a troy ounce compared to the average London morning fix in the first six months of $279.36.

The poll conducted in the last two weeks of July found that gold will average at $267.56 an ounce, down on the $294.70 forecast in a Reuters poll in January 1999.

Seventeen analysts made forecasts for the full year and 15 predicted the price for the last six months of the year.

Most analysts said gold's outlook remained bleak with International Monetary Fund and central bank gold sales overhanging the market.

Silver moved lower and was last quoted at $5.36/$5.38 a troy ounce, against the $5.43/$5.46 New York close on Friday.

Brokers GNI said in a report silver had retreated under general selling.

``Slightly negative is the further rise in Comex stocks on Friday to 77.6 million ounces, a gain of 0.6 million ounces,'' GNI said.

Traders noted that silver lease rates were also tightening with one-month lease rates last quoted on Reuters page at 1.75 per cent compared to Friday's 2.00 per cent.

Dealers said one-month rates were quoted as low as 1.35 per cent.

``When the forwards tightened against this morning, a few people started panicking slightly,'' a dealer said.

Platinum was last at $343.00/$345.00 from the New York close at $344.30/$346.30 while palladium was lower at $329.00/$334.00 against $334.35/$339.35.