Gold fell 1% on Monday as stock market recovery and US equity yields downplayed some of its attractive metal appeal, prompting investors to book a profit.
Spot gold was down 0.9% at $ 1,500.10 an ounce at 0906 GMT.
U.S. gold futures fell 0.8% to $ 1,511.80.
"The bond market choice seems to have stopped at least for now, and we saw some additional gains in stocks over the weekend, so a slightly more optimistic start to the week helps to attract profits in gold," said Saxo Bank stock strategist Ole Hansen .
"However, gold stays above $ 1
Benchmark US Treasury yields on Monday diverge from record lows after a closely watched US yield curve between two and 10-year bonds reversed for the first time since 2007 on Wednesday.
Equity markets across the globe grew as European markets rose for the second session as investors cheered signs of moves by Germany and China to counteract the slowdown in growth.
Over the weekend, US President Donald Trump and White House senior officials dismissed fears that economic growth may fail, saying they see little risk of recession. Trump also said he was "not yet ready to enter into a (trade) deal" with China.
Markets await Jackson Hole's symposium from the US Federal Reserve this week for greater clarity on the future path of interest rates. Traders saw an 83.7% chance of a decrease of 25 basis points in September.
"Given the political uncertainty that may or may not unfold later in the week from the Jackson Hole symposium, gold can be consolidated with a declining bias, before ultimately regaining its upward momentum," says in a note to Steven Ines, Managing Partner, VM Markets,
Lower interest rates reduce the alternative cost of holding non-performing bullion and weigh the dollar, making gold cheaper for investors holding other currencies.
However, the dollar index rose 0.1%, turning close to a two-week strong hit in the previous session.
The shares of SPDR Gold Trust, the world's largest exchange traded fund, fell 0.1% to 843.41 tonnes on Friday from Thursday.
Hedging and cash managers ranked bullish on COMEX gold and cut their net long positions in silver contracts during the week to August 13, the US Futures Commission (CFTC) announced on Friday.
Elsewhere, silver plunges 1% to $ 16.91 an ounce.
Platinum dropped 0.4% to $ 840.75 an ounce, while palladium