Gold tumbled to near a seven-week low this morning as a strengthened US dollar and higher bond yields pushed up the cost of holding the non-yielding asset.
The yellow metal fell 0.6 per cent, or $7.50, to $1,234.80 an ounce in morning trading.
The fresh loss came after gold booked its first monthly decline of the year at Friday's close.
Read more: Gold: Should you buy or sell?
"The US dollar started the week on a positive note as the US 10-year yields climbed past 2.30 per cent," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
Ozkardeskaya said: "The surge in the US yields are put on the European Central Bank’s (ECB) account rather than the Federal Reserve’s (Fed). Although the ECB president Mario Draghi’s speech had given no hint regarding an eventual tapering in the ECB's quantitative easing (QE) programme, the Eurozone yields spiked in the course of last week and the sudden surge in the Eurozone yields squeezed the US sovereign market higher.
"Yet, it is noteworthy to remind that the USD appetite could remain short-lived, if the Fed meeting minutes jog the Fed-hawks memory on Wednesday and remind them how disappointed they were following the Fed's June meeting."
Read more: Signs of a cooler US economy as Fed eyes normalisation
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