Gold dropped for a fourth session in five on Monday, drifting almost 1 percent below $1,200 an ounce as the dollar firmed after fresh comment from Federal Reserve officials that the central bank could look at raising U.S. interest rates soon.
Fed official Jeffrey Lacker on Friday repeated his call for the U.S. central bank to consider raising rates in June and said there is no shame in adjusting them lower again if economic data demands it.
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Spot gold slipped 0.8 percent to $1,198.07 an ounce by 0956 GMT. Bullion climbed 1.1 percent on Friday after a break of technical resistance triggered automatic buy orders.
"Gold remains hostage to broader macro forces; the backdrop this year has been the timing of the Fed rate hike and underperformance of emerging markets," Macquarie analyst Matthew Turner said.
"The real issue for gold is that it is hanging around this $1,200 level ... we are up towards the peak for the dollar that we saw earlier this year and are now waiting to see whether it carries on its rally or falls back. In the short term that sentiment is going to be important for gold."
Investors tend to shun gold when market expectations point to U.S. interest rates rising.
The timing of the first U.S. rate hike in nearly a decade remains the "key wildcard" for gold, said Barnabas Gan, analyst at OCBC Bank.
The dollar rose 0.5 percent against a basket of currencies, as weak Chinese export data knocked commodity currencies.
China's exports shrank 15 percent in March while import shipments fell at their sharpest rate since the 2009 financial crisis, deepening concern about sputtering growth in the world's No.2 economy.
Hedge funds and money managers raised their bullish bets on COMEX gold futures and options during the week to April 7 on views that the Fed could delay a rate increase after disappointing U.S. non-farm payrolls data this month.
Demand in China remained tepid with premiums on physical gold on the Shanghai Gold Exchange at $1-$2 an ounce over the global spot benchmark on Monday from a small discount late on Friday.
In other news, China's state-run SGE said on Sunday that it was working on launching new price benchmark fixing products as a new service to market participants.
Spot silver fell 0.8 percent to $16.30 an ounce, while platinum lost 1.3 percent to $1,154.49 an ounce and palladium was up 1.1 percent at $782.47 an ounce. (Additional reporting by Manolo Serapio Jr in Singapore; Editing by David Goodman)