Gold prices rose more than 1 percent on Monday, recovering from their lowest levels since February as the dollar and long-dated U.S. Treasury bond yields retreated from recent highs.
Spot gold was up 0.7 percent at $1,191.26 an ounce by 1119 GMT, after climbing as high as $1,197.54 earlier in the session. U.S. gold futures were up 1 percent at $1,190.30 an ounce.
Spot prices marked their lowest since Feb. 8 at $1,171.21 on Friday, under pressure from a 14-year high in the dollar. The metal has fallen 7 percent so far this month, as the dollar and bond yields benefitted from heightened expectations of enlarged fiscal spending by U.S. President-elect Donald Trump.
As gold pays no interest, the rise in returns from U.S. bonds and other markets is seen as negative for the metal.
The dollar index, which measures the greenback against a basket of currencies, was down 0.4 percent on Monday while the yield on 10-year U.S. Treasuries retreated from a 16-month high of 2.417 percent touched last week.
In other markets, crude prices were marginally lower on doubts OPEC can nail down an agreement to limit supplies and Europe's main stock markets also fell.
"If oil prices collapse or stay low then inflation won't pick up as much and there would be less of an incentive to raise U.S. rates rapidly and the dollar would not be as strong, which would be supportive for gold," ING head of commodity strategy Hamza Khan said.
"However, going forward, the equity market is going to be a bigger driver than the rush to safety for gold."
U.S. Federal Reserve policymakers appeared confident on the eve of the presidential election that the economy was strengthening enough to warrant an interest rate rise, minutes from the Fed's early November meeting showed.
Gold was riding on dollar weakness and the support for the yellow metal sits around $1,180 an ounce, while resistance comes in at $1,200, MKS PAMP Group trader Sam Laughlin said.
Traders also said a directive from the People's Bank of China to limit gold imports, was creating concerns about supply in the top consumer of the metal and kept premiums in Shanghai around $22. Gold premiums in China jumped to the highest in nearly three years last week on supply worries.
Demand from South East Asia is also quite good and buying at lower prices could have driven prices higher, said Cameron Alexander, an analyst with Thomson Reuters GFMS metals consultancy.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.73 percent to 885.04 tonnes on Friday.
Among other precious metals, silver rose 1 percent to $16.68 an ounce, palladium climbed 1.2 percent to $749.80 and Platinum was up 1.5 percent at $918.