Gold prices hovered near a 2-1/2-year low on Monday, on higher Treasury yields and a stronger dollar, while jitters over rising U.S. interest rates dented appeal for non-yielding bullion.
Spot gold was down 1.2% at $1,623.59 per ounce, after dropping to its lowest price since April 2020 at $1,626.41.
U.S. gold futures dropped 1.5% to $1,631.40.
"Gold is not the only game in town when it comes to safety. Money is also going into U.S. Treasuries," said Bob Haberkorn, senior market strategist at RJO Futures.
The outlook for gold is contingent on the Federal Reserve, Haberkorn said, adding that "it's kind of a storm that you have to weather right now if you're a gold investor."
Higher U.S. interest rates dull zero-yielding bullion's appeal, while bolstering the dollar and bond yields.
Gold has lost more than $400, or over 20%, since scaling above the key $2,000 per ounce level in March as major central banks raised interest rates.
Making gold more expensive for overseas buyers, the dollar hit its highest level since 2002.
"The move in the dollar is not over and that should keep the pressure on bullion," Edward Moya, senior analyst with OANDA, said in a note.
While the prospect of more rate increases dampens sentiment towards gold in the present, some analysts say bullion still remains supported by recession risks and geopolitical tensions.
"We've got dollar strength and an increase in the U.S. Treasury yields, which typically would push gold lower. However, broadly speaking, gold isn't doing too badly in the scheme of things," said Ross Norman, an independent analyst.
In the physical market, China's net gold imports via Hong Kong jumped nearly 40% to more than a four-year high in August, data showed on Monday.
Elsewhere, spot silver shed 2.6% to $18.36 per ounce.
Platinum fell .5% to $849.92, while palladium lost 1.2% to $2,043.05.