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Gold dropped for a fourth session in five on Monday as the dollar firmed, backed by expectations the Federal Reserve may be on course to raise US interest rates soon.
Fed official Jeffrey Lacker on Friday repeated his call for the US central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.
Spot gold was off 0.3 per cent at $1,204.16 an ounce by 0645 GMT. Bullion climbed 1.1 per cent on Friday as bulls attempted to push the price past the $1,210 resistance level.
US gold for June delivery was flat at $1,204.30 an ounce.
The timing of the first US rate hike in nearly a decade remains the "key wildcard" for gold, said Barnabas Gan, analyst at OCBC Bank.
Investors tend to shun gold, which doesn't pay interest, when market expectations point to US interest rates rising.
"If the Fed rate hike doesn't occur in June and if the (next) labour print doesn't come in as good as the market expects, gold could rise up to $1,250," said Gan.
US jobs grew at the slowest pace in more than a year in March, sending gold to a seven-week high of $1,224.10 on April 6 amid speculation the Fed could delay the rate increase.
Hopes of a delay pushed hedge funds and money managers to raise their bullish bets on COMEX gold futures and options for the second straight week during the week ended April 7, U.S. Commodity Futures Trading Commission data showed on Friday.
Gains in the dollar, which has benefited from anticipation of a US rate hike, weighed on gold. The greenback edged higher versus a basket of currencies, making dollar-denominated assets more expensive for holders of other currencies.
Demand in No. 2 gold consumer China remained tepid with premiums on physical gold on the Shanghai Gold Exchange at $1-$2 an ounce over the global spot benchmark on Monday from a small discount late on Friday.
China's exports shrank 15 per cent in March while import shipments fell at their sharpest rate since the 2009 global financial crisis, a shock outcome that deepens concern about sputtering growth in the world's No. 2 economy.
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