Gold prices fell more than 1 percent on Monday from the previous session's 13-month high as relief that North Korea did not conduct a missile test over the weekend helped to lift global stocks, the U.S. dollar and bond yields.
Demand for safer assets, including gold, also weakened after Hurricane Irma wreaked less damage in Florida than had been feared.
Spot gold was down 1.2 percent at $1,330.24 an ounce drop since July 3. On Friday it touched $1,357.54, the highest since August last year.
U.S. gold futures for December delivery settled down 1.2 percent at $1,335.70.
Gold had rallied 1.6 percent last week on fears of a North Korean missile launch and the impact of Irma on the U.S. economy, helping to drive the dollar to its weakest since January 2015 and U.S. bond yields to 10-month lows.
"Both of these events failed to materialise in a major way," said Saxo Bank analyst Ole Hansen.
"The short term stage has been set for some consolidation (in gold prices). Much depends on where the dollar and bonds decide to go."