Gold edged higher as the dollar drifted lower on Monday, although expectations of tighter U.S. monetary policy kept a lid on its gains.
Spot gold edged up 0.5 percent to $1,140.30 an ounce by 11:20 a.m. EDT. The bullion touched $1,122.35 on Thursday, its weakest since Feb. 2.
Thursday under pressure from a stronger dollar after hawkish rate forecasts from the Federal Reserve.
U.S. gold futures gained 0.4 percent to $1,142.20 per ounce.
The Fed hiked rates for the first time in a year last week and projected three more increases in 2017, up from the two projected in September.
"Coming at a time when investors are mindful of the stimulus effects of the new incoming U.S. regime (this) is likely to be good for equity valuation and weigh on gold and risk-off assets, at least in the short term," Mitsubishi Corp strategist Jonathan Butler said.
The dollar indexwas down 0.1 percent against a basket of six main currencies, European equities were mixed and U.S. stocks were higher as investors awaited a speech by Federal Reserve Chair Janet Yellen on "the State of the Job Market".
Richmond Fed President Jeffrey Lacker said on Friday the Fed faces challenges in gradually cooling off the U.S. economy.
"Going forward, the twin problem of high real interest rates, which have been rising on the back of a sharp increase in nominal yields, and high dollar will weigh on gold," ETF Securities analyst Martin Arnold said.
The benchmark 10-year U.S. Treasury yield rose to its highest since September 2014 on Thursday, before settling at around 2.6 percent.
Spot gold may bounce moderately to $1,153 per ounce as it has found a support at $1,121, according to Wang Tao, Reuters analyst for commodities technicals.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.63 percent to 836.99 tonnes on Friday. Holdings are down over 11 percent since November.
Hedge funds and money managers cut their net long position in COMEX gold contracts for the fifth straight week, taking it to a 10-month low in the week to Dec. 13, U.S. Commodity Futures Trading Commission data showed on Friday.
Silver gained 0.4 percent to $16.03 per ounce.
Platinum fell1 percent at $918.60. The white metal jumped 3.7 percent on Friday.
Palladium was down 1,8 percent at $680.22 an ounce, after falling to a one-month low in the prior session.