Gold reversed course to slip below the key $2,000 level on April 17, pressured by a stronger dollar and higher Treasury yields, while investors looked for cues on whether the market will see a 'one and done' rate hike by the U.S. Federal Reserve in May.
Spot gold was down 0.6% at $1,990.58 per ounce by 10:30 a.m. EDT (14:30 GMT) after rising as much as 0.6% earlier in the session. U.S. gold futures fell 0.6% to $2,003.
A stronger U.S. dollar and the rise in bond yields, along with some profit-taking from recent gains, are putting pressure on gold, said Jim Wyckoff, senior analyst at Kitco Metals.
U.S. dollar gained 0.6%, making greenback-priced bullion less attractive for overseas buyers. U.S. benchmark Treasury yields climbed to a more than two-week high.
The trend for gold is still up, and "I wouldn't be surprised to see gold hit a new record high in the coming weeks," added Wyckoff.
Gold dropped 2% on Friday after the dollar bounced, with Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic suggesting the Fed could hike rates by another 25 basis points (bp) next month.
However, economic data over the previous week has begun to fill in the portrait of a U.S. economy that is losing momentum, intensifying bets that the Fed's next increase will be its last.
The CME FedWatch tool shows markets are pricing in a 85% chance of a 25-bp hike in May, followed by 2-in-3 chances of a pause in June.
The $1,980-$2,000 range is a promising support zone for bullion, said Carlo Alberto De Casa, external analyst at Kinesis Money.
Investors will focus on comments from Fed officials this week before they enter into a blackout period from April 22 ahead of the Fed's May 2-3 meeting.
Spot silver fell 1.2% to $25.03 per ounce, platinum was up 0.5% at $1,050.14 and palladium gained 2.8% to $1,544.81.
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