The dollar slipped 0.4 percent against a basket of major currencies, mostly due to a stronger euro after the ZEW survey showed German economic sentiment rose in November for the first time in almost a year, beating expectations and raising hopes of an improvement in Europe's biggest economy.
A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies.
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Gold had dipped earlier in the session as the dollar was boosted by economic data showing that while U.S. manufacturing output rose only modestly, factory activity rebounded in New York State.
Markets were awaiting minutes of the Federal Reserve's October meeting, to be released on Wednesday.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.33 percent to 723.01 tonnes on Monday, the first increase since Nov. 3.
Elsewhere, India's central bank is in talks with the government to increase curbs on gold imports and an announcement could come as early as Tuesday, a finance ministry source said.
More curbs could hit demand from India, the second biggest gold consumer, and add pressure on gold prices.
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In top consumer China, local prices held steady at a premium of $2-$3 an ounce, as buying picked up on steadier prices. Sustained robust buying could support prices.