Gold fell on Monday for a third day, with demand for bullion hurt as the dollar arrested three weeks of declines after hawkish comments from U.S. Federal Reserve officials renewed expectations of U.S. interest rate hikes.
The dollar rose 0.3 percent against a basket of currencies, as two central bank officials, San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart, raised the possibility of a rate hike as soon as April.
Spot gold was down 0.82 percent at $1,244.50 an ounce, while U.S. gold futures for April delivery settled down $10.10 an ounce at $1,244.20, and last traded down $9.70 at $1,244.60.
"We're going to see some more selling pressure because it seems like the possibility of rate hike is still on the table," said George Gero, managing director at RBC Wealth Management.
"Longer term, we're going to see higher prices because of the continued stimulus expected in the euro zone and China."
The metal has risen nearly 17 percent this year on fading expectations for rate hikes.
It rallied on Wednesday after Fed policymakers revised down the number of times they expect to raise interest rates this year to two from four, but it failed to revisit the previous week's 13-month high, and it slid as the dollar rebounded.
Analysts said the Easter holidays at the end of the week will cost gold some momentum.
Market indicators are signaling that investors see stronger risks of inflation, which has been almost non-existent since the credit crisis, despite skepticism from the Fed.
Some economists fear that ultra-low interest rates around the world will eventually stoke inflationary pressures. Gold has benefited from low rates, which cut the opportunity cost of holding non-yielding assets like gold.
Holdings of gold-backed exchange-traded funds, which issue securities backed by physical metal, continued to rise.
The largest, New York-listed SPDR Gold Shares, reported an 11.9-tonne inflow on Friday, bringing its total inflow for the year to 176.6 tonnes, up from 40.8 tonnes in the same period of last year.
Silver futures were up 0.28 percent at $15.85 an ounce, while platinum futures were up 1.3 percent at $982.90 an ounce and palladium futures were up 2.2 percent at $603.05 an ounce.