Gold reversed course to trade higher after the dollar fell as weakness in the U.S. economy fueled expectations the Federal Reserve would likely slow the pace of its interest rate hikes.
Spot gold was up 0.4% at $1,654.58 per ounce, while U.S. gold futures settled 0.2% higher at $1,658.
"We're seeing some weakness in the dollar and some upside in some of the other currencies against the dollar, and it's pushing gold back up," said Bob Haberkorn, senior market strategist at RJO Futures.
The dollar index, which measures the currency against six major peers, was down about 0.9%, making gold less expensive for overseas buyers.
A survey on Monday showed U.S. business activity contracted for a fourth straight month, sparking bets the Fed might rein in its aggressive policy stance.
If the Fed goes with a rate hike below the expected 75 basis points, that'll signal a slowdown in these hikes and be bullish for gold, "but gold traders are waiting for something more concrete," Haberkorn added.
Rising interest rates dim bullion's appeal as they increase the opportunity cost of holding the non-yielding asset.
"Investors are still giving gold the cold shoulder, thereby generating persistent headwind," with positioning data indicating that a majority of speculative financial investors are continuing to bet on a falling gold price, Commerzbank analysts said in a note.
Speculators switched to net short positions of 20,633 contracts in COMEX gold in the latest week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Meanwhile, data showed top consumer China's net gold imports via Hong Kong in September halved from the previous month.
Spot silver rose 0.4% to $19.34 per ounce, platinum shed 0.8% to $917.53, while palladium dropped 2.1% to $1,926.75.