Gold turned lower on Monday, as the dollar pared losses, and U.S. shares and other commodity markets staged a comeback while the white precious metals fell on concerns about the Chinese economy.
World stock markets initially plunged after a near-9 percent dive in China shares, attracting safe haven buying to gold as crude oil futures fell sharply to 6-1/2-year lows and copper to a six-year low.
The 19-commodity Thomson Reuters CoreCommodity Index fell as much as 3.2 percent to the lowest level since December 2002 after slumping Chinese equities fueled worries of a hard landing in the world's biggest consumer of raw materials.
"There is no real fundamental reason to buy gold with interest rates purportedly going to rise soon and I anticipate that those holding a small percentage of gold in their portfolio would be inclined to liquidate as their equity portfolio's get pummeled," said Barry Steinman, an independent trader in Philadelphia.
The U.S. dollar fell 1.7 percent to its lowest since the end of January before paring losses.