Gold fell for the third straight session on Monday, but hovered above Friday's two-week low, pressured by comments from Federal Reserve Chair Janet Yellen that reinforced expectations of an increase to U.S. interest rates this month.
Spot gold was down 0.6 percent at $1,226.61 an ounce, having slid on Friday to $1,222.51, the lowest since Feb. 15.
U.S. gold futures settled down 0.08 percent at $1,225.50.
Yellen said last week that the Fed was poised to lift benchmark U.S. rates provided jobs and inflation data held up, comments seen as cementing plans for an increase at the Fed's
March 14-15 meeting.
"Our economists now expect three rate hikes in 2017 and two in 2018," said Standard Chartered in a research note, pointing to March, June and December.
Higher U.S. rates would boost the U.S. currency and make dollar-priced commodities more expensive for holders of other currencies.
"Fed comments have become increasingly hawkish," Societe Generale analyst Robin Bhar said, adding that the next set of U.S. data to watch would be non-farm payrolls due this week.
The U.S. monthly jobs report on Friday includes the non-farm payrolls, seen rising by 190,000 in a Reuters poll.
"The U.S. labor market is tight, inflation is picking up ... investment is revving up, consumer confidence readings are increasing and both housing and equity valuations are moving higher," INTL FCStone analyst Edward Meir said in a note. However, traders said that geopolitical tensions created by North Korea firing four ballistic missiles into the sea off Japan's northwest coast were supportive to bullion.
"European elections are also a source of uncertainty; gold will get support from that," one trader said, adding that there was strong support for gold around $1,210, the 100-day moving average.
The market will also await monetary policy decisions from the European Central Bank.
"Mario Draghi and his colleagues may hint at the prospects of tapering QE early," said Fawad Razaqzada, technical analyst for Forex.com, adding that this would be bullish for the euro.
Physical gold holdings in exchange-traded funds have fallen since last week, partly because of the stronger dollar, but at 54.855 million ounces are still more than 3 percent higher than at the start of February.