The yellow metal fell back to near $2,700 early in the week's opening trade after a high last week.
US dollar selling activity and geopolitical tensions continued to support gold's safe-haven status in the market.
At 9.20 am, gold prices were at $2,703.37, down 0.47% since it opened in early trading on Monday in the Asian session.
For now, investors will be closely monitoring the developments in the Russia-Ukraine conflict when last week Russian President Vladimir Putin signaled nuclear weapons in response to a broader conventional attack.
In addition, the United States also allowed Ukraine to use weapons to strike long-range targets in Russian territory and this will continue to support gold's position.
High Ridge Futures Trading Director David Meger said that key geopolitical factors in the gold market have begun to rise in recent days due to tensions between Russia and Ukraine.
Meanwhile, several Fed officials remain cautious about expectations of interest rate cuts and this will limit the rise in the precious yellow metal.
The market is adjusting its expectations for a Fed cut next year as inflation becomes a bigger concern.
According to the CME FedWatch Tool, futures traders are now pricing in a 50.9% chance that the Fed will cut rates by a quarter point, down from around 69.5% a month ago.
