Gold declined as the dollar remained resilient and 10-year Treasury yields held near the highest level in more than a year, weighing on the precious metal that does not offer interest.
Investors will turn their attention to a heavy slate of bond auctions focused in maturities that have been pummelled amid a brightening outlook for growth and inflation.
US Federal Reserve chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will continue to provide aid to the economy "for as long as it takes" as the recovery is far from complete.
Richmond Fed president Thomas Barkin said in a Bloomberg interview on Sunday that there is no sign yet of unwanted inflation pressures.
Bullion has dropped about 8 per cent this year, with investors rotating out of havens into riskier assets, although its role as a hedge against inflation has helped give some support to prices.
On Friday, the Fed said it will let a significant capital break for big banks expire the end of the month. That saw the dollar and bond yields tick higher, with the latter holding near to its highest levels in about 14 months on Monday.
“The opportunity cost of being in a reflationary environment seems to be holding gold back,” said Chris Weston, head of research at Pepperstone Group. “The appeal of gold as a portfolio hedge is not there either, with the US dollar a seemingly better play.”
Spot gold fell 0.3 per cent to $1,740.79 an ounce by 11.49am in Singapore (7.49am UAE time), after rising 0.5 per cent on Friday. Silver, platinum and palladium all retreated. The Bloomberg Dollar Spot Index advanced a third day.
Meanwhile, Mr Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the US House Financial Services committee to testify on Fed and Treasury pandemic policies on Tuesday.
