Gold fell early on Monday after hitting its highest in over a year in the previous session, as the dollar recovered from last week's lows and as lack of geopolitical developments dented safe-haven appeal.
Spot gold was down 0.8 percent at $1,335.10 an ounce by 0705 GMT. It rose to $1,357.54 on Sept. 8, the highest since Aug. 16, 2016.
U.S. gold futures for December delivery were also down 0.9 percent at $1,339.40 an ounce.
"The major determinant of gold last week was actually geopolitical tensions, but over the weekend, we did not see any crisis triggering event so we're going to have less chances for gold prices in the upward direction," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
The U.S. dollar won a reprieve from risk aversion on Monday and pulled away from last week's 2-1/2 year low after North Korea held a party over the weekend rather than launch another missile.
"I would go long on the dollar for one week or so, but not for too long because the major determinants, the geopolitical tensions, are still with us and the slowing of interest rate hikes and other tightening measures are going to be with us as well," To said.
North Korea warned on Monday the United States would pay a "due price" for spearheading a U.N. Security Council resolution against its latest nuclear test.
Federal Reserve policymakers are expected to discuss balance sheet shrinkage at their next meet from Sept. 19 to 20 in Washington and are widely expected keep interest rates unchanged.
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