Gold moved lower to around $2,770 at the opening of the week on renewed US dollar demand pressure.
The potential downside may be limited amid caution and uncertainty over US President Donald Trump's tariff moves.
At 9.20am, gold was at $2,768.28, down 0.09% since it opened in early Asian trading on Monday.
The US dollar strengthened as Donald Trump triggered a trade war with global tariffs.
Recently, Trump imposed retaliatory measures on Colombia including tariffs and sanctions when the country refused to allow two military planes to repatriate migrants.
He also said he would order an emergency tariff of 25% on all Colombian goods entering the US, which would be increased to 50% within a week. The report shifted the market's focus to gold commodity prices and Federal Reserve (Fed) expectations.
The US Fed is expected to hold interest rates steady at its January meeting, with the FOMC meeting being closely watched as it may offer some clues as to the path of rates going forward.
At the World Economic Forum last week, Trump called for an immediate interest rate cut, sending the USD to its lowest level in over a month and supporting gold prices.
However, if Fed officials deliver a hawkish statement this week, it could drag the yellow metal lower.
