Gold slipped from the five-week high it hit earlier in Monday's session, as the dollar bounced back from a one-month low against a basket of currencies.
Firm oil prices, which are holding near the record highs they touched this morning, are continuing to support buying of the precious metal as an inflation hedge, however.
Gold was at $928.10/929.10 an ounce at 1343 GMT, up from $927.20/928.20 an ounce late in New York on Friday. Earlier it touched a session high of $934.55 an ounce, its firmest level since May 22.
"The dollar has come back, (and) gold has made good gains in the last couple of days, so we would expect to see it lightening up a tad," said BNP Paribas analyst David Thurtell.
The dollar, which wilted last week after the US Federal Reserve adopted a less hawkish tone than expected on interest rates, slid to a one-month low on Monday, battered by weak equities, strong oil and weak US consumer confidence.
However, it later bounced back to trade 0.2 percent higher against the euro on the day, supported by month- and quarter-end position squaring, traders said.
A firmer dollar tends to pressure gold, which is often bought as a hedge against weakness in the US currency. A stronger greenback also makes dollar-priced commodities more expensive for holders of other currencies.
The other main external driver of gold, oil, is still underpinning the precious metal. Crude hit a new record of $143.67 a barrel on rising tension between Iran and Israel.
Rising crude prices boost gold's appeal as a hedge against oil-led inflation, as well as fuelling investment interest in commodities in general. The stock market slide of late last week is also benefiting commodities as an asset class as traders seek alternative investments, analysts said.
Among other precious metals, spot platinum rose to $2,057.00/2,077.00 an ounce from $2,053.50/2,073.50 late in New York. Spot palladium was little changed at $463.50/471.50 an ounce from $463.00/471.00 an ounce. Speculators have booked profits after the price jumped to a three-month high of $477 on June 19. Silver was steady at $17.55/17.61 an ounce from $17.52/17.61 late in New York. The largest silver ETF listed in New York, the iShares Silver Trust, said its holdings edged up to 6,002.41 tonnes on June 26 from 5,971.63 tonnes. -Reuters