Bullion had risen for two consecutive sessions after touching a four-month low of USD 1,241.20 on Friday. Spot gold ended last week about 4.5-percent lower, its biggest weekly decline since November 2015.
Fed Vice Chairman Stanley Fischer said on Saturday that US inflation will likely rebound as pressure from the dollar fades, allowing the US central bank to raise interest rates gradually.
Some Asian stocks recovered in tandem with US futures even as Chinese shares tanked further. The dollar gained versus a basket of currencies after falling the most since 2011.
After Monday's rout, most Asian stocks recovered in tandem with US futures and Chinese shares pared losses.
Tensions in the Middle East after Saudi Arabia and its allies launched air strikes in Yemen provided some support to gold, seen as a safe-haven asset.