Gold steadied on Monday as the dollar fell and European shares dipped following the failure by oil producers to agree an output freeze, which sent crude prices tumbling.
Brent crude futures dropped as much as 7 percent as an output freeze deal by OPEC and non-OPEC producers fell apart on Sunday when Saudi Arabia demanded Iran join despite calls on Riyadh to save the agreement and prop up crude prices. They were last down 0.49 percent at $42.89.
Spot gold was down 0.12 percent at $1,232.16, rebounding after a 0.5 percent loss last week.
"Oil prices have fallen between four and five percent, dragging equities down, and you would think to see some safe-haven buying in gold," Citi strategist David Wilson said.
Gold prices have steadied after posting their biggest quarterly rise in nearly 30 years in the three months to the end of March on reduced expectations that the U.S. Federal Reserve will push ahead with several rate rises this year.
Since its December rate rise, the Fed has slowed its expected pace of subsequent increases in response to risks a slowdown in the global economy could be more severe than anticipated.
"Gold prices are likely to stay supported around $1,260 in the second quarter ahead of the Fed's rate increase, which may happen in July," Natixis analyst Bernard Dahdah said.
Markets are pricing in only one rate increase this year but recent upbeat economic data and hawkish comments from Federal Reserve officials have kept investors on edge.
The Fed is unlikely to raise U.S. interest rates when it meets later this month but seems to be on track for at least two increases over the rest of the year, Chicago Fed President Charles Evans said on Friday.
The dollar was down 0.22 percent against a basket of major currencies, mostly due to a supported , also seen as a hedge in times of financial uncertainty.
Assets in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 5.64 tonnes to 812.46 tonnes on Friday, the first increase in a week.
Hedge funds and money managers raised their bullish bets on gold and silver in the week to April 12, U.S. Commodity Futures Trading Commission data showed on Friday.
Higher gold prices this year have kept a lid on physical demand in key markets, India and China.
Among other precious metals, silver futures were down 0.6 percent at $16.22 an ounce, while platinum futures fell 1.2 percent to $977.60 and palladium futures were down 0.26 percent at $566.75.