The metal fell more than 10 percent last year, largely on the back of expectations that the Federal Reserve is set to normalize U.S. interest rates. Ultra-low rates, which cut the opportunity cost of holding gold while weighing on the dollar, were a key factor driving gold to record highs in 2011.
The Fed raised rates in December and attention has shifted to how many hikes will follow in 2016.
Atlanta Federal Reserve Bank President Dennis Lockhart said there may not be enough fresh data on inflation to support another U.S. rate hike by March.
Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose 2.1 tonnes on Monday, data from the fund showed.
Among other precious metals, palladium was the biggest decliner, sliding 5 percent to a 5-1/2 year low of $449.55 an ounce in early trade. It was later at $463.50 an ounce, down 3.4 percent.
Silver was down 0.51 percent at $13.80 an ounce, while platinum was down 0.90 percent at $838.70 an ounce.