Gold slipped to a more than two-week low on Monday as a firm dollar and more risk appetite outweighed support coming from expectations of a pause in the U.S. interest rate hike cycle.
Spot gold was 0.2 percent lower at $1,279 per ounce by 1123 GMT, having hit its lowest since Jan. 4 earlier in the session of $1,277.11.
U.S. gold futures were down 0.3 percent at $1,278.20 per ounce.
"Some calm has been restored in the equities market ... We are seeing a bit of withdrawal of interest from the gold market," said Macquarie commodity strategist Matthew Turner.
World markets showed some relief from Chinese economic data that were in line with expectations and offered some bright spots, although concerns about Prime Minister Theresa May's plans for Brexit prompted some caution.
U.S. markets were closed on Monday for a holiday.
"Gold could already find itself in increased demand today if the UK prime minister's 'Plan B' for Brexit turns out to contain nothing new and the chaos thus continues," Commerzbank analysts wrote.
A stronger dollar, near a two-week high, weighed on gold, which rose more than 10 percent since mid-August mainly on the back of equity market turmoil and a weak dollar.
ActivTrades chief analyst Carlo Alberto De Casa said a breakout through $1,277 for gold could lead the price down to $1,260.
Analysts said gold was still finding some support from expectations that the U.S. Federal Reserve had reached the end of its monetary tightening, a slowdown in global economic conditions and geopolitical uncertainties, analysts said.
Fed officials have left little doubt they want to stop raising interest rates, at least for a while, before their first meeting of the new year on Jan. 29-30.
Higher rates tend to drive down appetite for non-yielding gold.
Holdings of SPDR Gold, the largest gold based exchange traded fund, rose 1.5 percent on Friday to 809.76 tonnes.
Meanwhile, spot palladium, which hit a record high of $1,434.50 last week driven by a sustained deficit, was little changed at $1,376.86.
"As a result of the strong rally over the last couple of months, the palladium market may see some consolidation before resuming its upward path," said Hans-Guenter Ritter, Global Head of Trading at Heraeus Metals, Germany.
Silver fell 0.7 percent to $15.21 per ounce, while platinum was little changed at $797.