Gold edged down to around $US925 an ounce on Monday, as the US dollar's broad rise before this week's Federal Reserve meeting dulled some of the precious metal's allure as a currency hedge.
A rise in holdings for the world's largest gold-backed exchange-traded fund to a new record high provided support, highlighting continued investor interest in gold.
Gold was at $US925.80 an ounce in Asian trade, down 0.2% from New York's notional close on Friday.
At current levels, bullion is down about 8% from an 11-month high above $US1000 hit last month.
Gold is down 1.3% compared with a week earlier, after touching a one-month low below $US900 last Tuesday.
"There doesn't seem to be any particular driver (for the gold market) apart from the dollar,'' said Darren Heathcote, head of trading at Investec Australia.
The US dollar rose broadly on Monday, with the market looking ahead to a Federal Reserve policy meeting this week after a Group of 20 finance ministers' meeting at the weekend gave the market few trading incentives.
A stronger US dollar typically weighs on gold, which is often bought as a currency hedge, although the relationship has weakened in recent sessions as both have benefited from safe-haven buying because of the financial crisis.
Heathcote said news last week that the Swiss National Bank had moved to rein in the franc's strength to boost the economy would continue to be a factor in the market.
"That will certainly be adding to some of the uncertainty that we've been experiencing and I guess that could mean ultimately we'll see some effect of that on gold,'' he said.
News of the Swiss bank's move and fresh inflows into exchange-traded funds helped gold's rise on Friday.
The Swiss National Bank sold its currency against the euro last week, a move seen as opening the door to the use of currencies as a policy tool.
Central banks are seeking unconventional ways to boost their economies now that many have interest rates at historic lows.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings hit a record 1056.82 tonnes on March 15, up 15.29 tonnes, or 1.5%, from the previous day.
In another sign of keen interest in gold, mints around the world said demand for gold coins had risen sharply because of financial instability and concerns over the inflation outlook.
