Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding the precious metal.
European shares steadied and U.S. stock index futures rose while the British pound set a seven-week high against the dollar.
In other news, the United Kingdom was the main destination for Swiss gold exports for a third straight month in May, data from the Swiss customs bureau showed on Tuesday, as investment in bullion-backed funds based in Britain continued.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.10 percent to 908.77 tonnes on Monday, the highest since September 2013.
"We think that gold is under short-term volatility, but longer-term factors driving the gold demand are still intact," said Richard Xu, fund manager of China's top gold exchange-traded fund (ETF) HuaAn Gold.
"We think that gold could be a very good buying opportunity if it pulls back a little bit," Xu said.