Gold turned lower and fell below $1,240 an ounce on Monday, as stock markets and the dollar gained, and investors squared positions ahead of closely watched policy meetings of U.S. and Japanese central banks this week.
The weak move followed Friday's brief bounce to a 13-month high after the European Central Bank signaled an end to rate cuts and the euro rose sharply versus the dollar. Gold is highly sensitive to monetary policy and resulting currency moves.
Spot gold was down 1.3 percent at $1,231.96 an ounce, off an earlier high of $1,260.71. U.S. gold futures for April delivery settled down 1.1 percent at $1,245.10 an ounce and last traded down 2.1 percent at $1,232.90.