Gold fell as much as one percent on Monday as Wall Street hovered near record highs and investor jitters calmed following a failed coup attempt in Turkey.
Spot gold fell earlier to a session low of $1,323.43 an ounce and was down 0.6 percent at $1,328.96 by 3:36 p.m. EDT (1936 GMT). Bullion fell over 2 percent last week, its first weekly decline in seven weeks, as investors piled cash into riskier assets.
"We're seeing a little bit of follow-through from the weekly reversal," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.
"Barring outside market influence, the market could drift back to the $1,300 level."
U.S. gold settled up 0.1 percent at $1,329.30 per ounce.
Turkey widened a crackdown on suspected supporters of a failed military coup, taking the number of people rounded up in the armed forces and judiciary to 6,000. The government said it was in control of the country and economy.
Gold turned higher immediately after news of Turkey's coup on Friday, as demand for assets perceived as safe, such as bullion and bonds, briefly spiked.
"After the metal broke below support at $1,340 an ounce, a push lower is possible, as the situation in Turkey 'stabilized' and there are no new headlines on the Brexit saga," ActivTrades chief analyst Carlo Alberto De Case said.
Gold gained $100 in the two weeks following Britain's vote to leave the European Union, as worried investors started putting their cash into safe-haven assets, before falling back.
This vote has led analysts to raise their gold price forecasts again this year, a Reuters poll showed.
The dollar was little changed against a basket of six currencies, while European equities briefly rose to a three-week high. [MKTS/GLOB]
The Dow Jones Industrial and Standard & Poor's 500 rose as Bank of America's better-than-expected profit and a tech sector deal fed recent optimism about a stronger U.S. economy.
"On one side, more monetary stimulus around the world supports risk sentiment, but on the other side it makes commodities more attractive," ABN Amro analyst Georgette Boele said.
Adding further pressure on bullion was positive U.S. retail sales data, which rose more than expected in June.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Among other precious metals, spot silver was down 0.8 percent at $20.03 an ounce and platinum was up 0.6 percent at $1,092.5 an ounce.
Palladium was down 0.5 percent at $643.22 an ounce, falling from Friday's 8-1/2-month high at $652.