Bullion dealers capped the market to protect themselves before over-the-counter options rolled off the books at 9:30 am EDT (1330 GMT). But traders said volatility should pick up during the day.
"We hear large hedge funds have shorted gold big time on the back of crude and the US dollar and they all have large buy stops above the market," wrote Ian MacDonald, managing director of precious metals at International Assets Holding Corp "Historically, markets will always go to the level of greatest pain," he wrote in a client note.
December gold at 10:16 am EDT (1416 GMT) was off 90 cents at $409.10 an ounce, trading from $411.80 to $408.10.
Meanwhile, Russian authorities were turning to recovered flight recorders to determine what caused two aircraft to crash at nearly the same time Tuesday, killing at least 89, minutes after taking off from the same airport.
Markets immediately suspected extremists brought the planes down, and turned to gold as a safe haven.
Gold rose $5 on Wednesday, and closed back in on last week's four-month high at $416.80, after a sharp retreat in oil prices pulled the contract down to $404.60 on Tuesday.
Gold has correlated more closely to oil prices this week than the dollar. Light sweet crude oil on the New York Mercantile Exchange fell 1.2 percent Thursday, after reaching a record near $50 a barrel on Friday.
But investors continue to show interest in gold as portfolio insurance, after being warned of a greater risk of al Qaeda attacks timed for the Republican National Convention in New York City next week.
Spot gold was quoted at $406.05/80, down from the close at $407.25/8.05. The afternoon fix in London was $406.05.
September silver was off 0.8 cents at $6.605 an ounce, trading from $6.70 to $6.575. Spot silver fetched $6.57/60, down from $6.59/62 late Wednesday. Thursday's fix was $6.60.
October platinum was 10 cents firmer at $857 an ounce. Spot platinum was at $853.00/858.00.
September palladium was off $1 at $214.50 an ounce. Spot palladium fetched $213.00/218.00.