"The three-week high hit on Friday is just a pause in the downtrend. It is true the speculators community has come back a bit but overall the big macro picture has not changed," ABN Amro analyst Georgette Boele said.
"We still expect interest rates to be hiked next year in the U.S. and possibly more quickly than the market currently anticipates - that will pressure gold."
The dollar declined 0.2 percent against a basket of leading currencies and still trading close to a four-year high.
A strong greenback makes dollar-denominated gold more expensive for holders of other currencies.
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Bullion has been pressured by a strong dollar and robust economic prospect for the United States in recent weeks, hitting a four-and-a-half-year low earlier this month.
The Federal Reserve's relatively hawkish position compared with other central banks and strength in the dollar should continue to pressure gold, analysts said.
"Despite the massive easing that is being initiated by a number of central banks, we are not sure this will be enough to justify a sustained rally (in gold)," said INTL FCStone analyst Edward Meir.
Hedge funds and money managers boosted their net long position in gold futures and options to 60,307 lots in the week to Nov. 18, the Commodity Futures Trading Commission said on Friday. That marked the biggest increase in a month and the highest bullish stance since late October.
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In the physical markets, Chinese prices were trading at a premium of $1-$2 an ounce on Monday, unchanged from the previous session.
Traders are now hoping that a cut in interest rates would revive appetite for gold jewellery, bars and coins in China.
Demand slid by more than fifth in the first nine months of the year, according to the China Gold Association, as buying eased after record consumption last year and as consumers became wary of falling prices.