Gold was fixed at $293.10 an ounce on Monday morning, well down on London's Friday afternoon fix at $296.85, as the market succumbed to fund and producer selling in Asia and early Europe.

``It was looking very good at the back end of last week. It looked like we might break $300,'' said an analyst. ``I was very optimistic, but now we've broken below support and we're back in the $288/$295 range. It's really disappointing.'' Auction results will be announced at around 1215 GMT and gold is expected to sell near the current price, much higher than the first two sales at $261.20 and $255.75, respectively.

The gold market has positioned itself to profit from a price rise at the sale but auction interest had been difficult to gauge with US markets closed from last Wednesday for aholiday.

The first two auctions confounded expectations and analysts cautioned that the market might turn around again if this sale failed to deliver on its high expectations - a price at or above the spot market and a wealth of bids.

`` Now the concern is if those aren't realised - high levels of subscriptions and a price at spot - the price could (ease),'' analyst at Macquarie Equities, Kamal Naqvi told Reuters Television. ``(But) there is enough support at the mid-280s and certainly the mid-270s to resist aggressive selling.''

The first sale in July disappointed and helped kick prices towards 20-year lows at $251.70, prompting angry criticism from miners and mining nations fearing job and foreign exchange losses as central banks pressured gold prices.

But a solid September sale, news of European central bank restraint in gold sales and lending and hedging difficulties of Ghanaian miner Ashanti Goldfields Co Ltd turned the market around and sent gold sprinting to two-year highs at $338.

Exchangedata show the market has a net long position for the first time in a year - a clear sign it expects prices to rise.

In contrast to July, gold in September was awarded at a small premium to the benchmark London gold fix, an unusual situation that reflected fears of difficulty in deliveries. Bids exceeded gold on offer by eight to one.

To be judged a success, analysts say this auction must be even better - with more bids per offer and perhaps a higher premium.

``If the subscription is low, we could be in for a sell-off,'' said a trader at a Swiss bank in Zurich.