Gold hit a new two-month high on Monday before easing on a firmer dollar and weaker oil prices, but sentiment remained bullish on healthy technicals and geopolitical concerns, traders said.

Silver also traded off its two-month highs, while platinum retreated after surging the past week on speculation that an exchange traded fund could be launched.

"Some of the technical indicators have turned very strong," said Michael Widmer, metals analyst at Calyon Corporate and Investment Bank.

"With all the deceleration in U.S. economic growth, there could be further pressure probably on the dollar and that means that you should have further upward pressure on the gold price."

Gold was quoted at $624.20/625.20 an ounce by 1059 GMT after briefly touching a high of $629.40, the highest since September 7. It closed at $627.50/628.50 in New York late on Friday.

"We believe that gold has clearly regained its historical correlation with the U.S. dollar, and we continue to expect a weakening dollar to support a higher gold price," Goldman Sachs said in a research report.

It remained bullish on gold, but lowered its forecast for gold prices at the end of 2007 to to $750 from $800.

The dollar marginally gained against the dollar on Monday.

Traders said strong seasonal demand was also expected to underpin the metal.

"Gold tends to rise toward the end of the year when demand picks up ahead of the Christmas holiday season," said Hisaaki Tasaka, a market analyst at Ace Koeki Co. Ltd. in Tokyo.

In this bullish mood, investors are also focusing again on geopolitics, such as Iran's military exercises, to buy gold."

Iranian state radio said that Iran test-fired three new missiles on Friday, bringing the whole Gulf region within the range of the Islamic Republic's weaponry.

In other metals, platinum edged down but stayed firm. It fell to $1,183/1,189 an ounce from $1,198/1,204 in the U.S. market on Friday, when it rose to its highest since September 11.

"Barring any official confirmation, the rumors of a platinum exchange-traded fund should continue to underpin the market," Standard Bank said in a daily note.

An interim review next week by Johnson Matthey, the world's top platinum distributor, should also provide support to the metal as the report was expected to indicate demand outstripping supply in 2006 for the eighth consecutive year, the bank said.

Silver was trading at $12.48/12.55 an ounce, compared with $12.58/12.64, while palladium was at $330/335 an ounce, versus $328/333.